• Wed. Dec 2nd, 2020

European stocks sink as traders assess US Fed’s inflation shift – Yahoo Finance


The Federal Reserve will now tolerate inflation “moderately” above its 2% target, Jerome Powell said. Photo: Xinhua/Liu Jie via Getty Images

European stocks fell on Friday as markets continued to try and make sense of the historic shift on inflation announced by US Federal Reserve chair Jerome Powell.

would launch a new monetary policy framework that will likely see interest rates in the US remain low for longer.

The Federal Reserve will now tolerate inflation “moderately” above its 2% target, Powell said, noting that persistently low inflation in the US over the last eight years has caused a series of economic problems.

^STOXX) fell by around 0.8%, while London’s FTSE 100 (^FTSE) fell by around 0.5%.

^GDAXI) fell by around 0.9% after a steep fall in consumer sentiment in August, while France’s CAC 40 (^FCHI) was down by around 0.8%.

The declines in Europe followed a broadly positive session in Asia.

^SSEC) rose by 1.6%, while the Hang Seng (^HSI) closed 1.4% in the green in Hong Kong.

^N225) fell by 1.4% after the country’s long-serving prime minister, Shinzo Abe, said he would resign due to ill health.

^KOSPI) in South Korea climbed by around 0.4%, while Australia’s ASX 200 (^AXJO) fell by more than 0.8%.

try and nudge inflation higher.

ES=F), were up by more 0.1%, putting the index on track for its seventh straight day of gains. Dow Jones Industrial Average futures (YM=F) rose similarly.

NQ=F), which snapped its five-day winning streak on Thursday, fell marginally.