U.S. shares were set to drift higher this morning as investors were relieved by the head of the Federal Reserve indicating it will “proceed carefully” on interest rates, the Associated Press reports. Dow futures were up 0.3% at 34,464.00, and S&P 500 futures rose 0.2% to 4,423.50.
In a highly anticipated speech, Fed Chair Jerome Powell said Friday that the Federal Reserve will base upcoming interest rate decisions on the latest data about inflation and the economy. He said while inflation has come down from its peak, it’s still too high and the Fed may raise rates again if needed.
Some market watchers had hoped Powell would say the Fed was done with its hikes to interest rates, but Powell also took care to say he’s aware of the risks of going too far on interest rates and doing “unnecessary harm to the economy.” Altogether, the comments weren’t very different from what Powell said before.
The Fed has already hiked its main interest rate to the highest level since 2001 in its drive to grind down high inflation. That was up from virtually zero early last year.
The higher rates have sent the manufacturing industry into contraction and contributed to three high-profile U.S. bank failures while also helping to slow inflation.
In energy trading, benchmark U.S. crude edged up 49 cents to $80.32 a barrel. Brent crude, the international standard, rose 40 cents to $84.88 a barrel.
In currency trading, the U.S. dollar rose to 146.56 Japanese yen from 146.40 yen.
