FTSE 100 opened up 10 points, or 0.17% at 6773 points, following yesterday’s announcement by the US Federal Reserve and in anticipation of the latest update by the Bank of England.
“After an early gain the FTSE 100 took a step back on Thursday as investors tried to decipher the latest meeting of the US Federal Reserve,” says AJ Bell investment director Russ Mould.
“In some ways Fed chair Jay Powell and his colleagues delivered what the market wanted which was a commitment to keep interest rates low. However, it is now a question of the credibility of this argument,” Mould added.
Connor Campbell, financial analyst at Spreadex, commented on the FTSE’s move on and looked ahead to the Bank of England’s announcement later in the day.
“Once again the black sheep of the Western markets, the FTSE fell 0.2% in anticipation of the Bank of England’s Thursday get-together,” said Campbell.
“Like the Fed, Andrew Bailey and the MPC will be walking a tightrope, needing to celebrate the vaccine-led economic recovery in the UK, reassure about the impact of rising inflation on interest rates, and soothe concerns that the central bank will be turning off the taps any time soon.”
FTSE 100 Top Movers
Informa (3.22%), Rightmove (2.46%) and Standard Life Aberdeen (2.16%) lead up the index as the day’s top movers so far.
At the other end, the biggest fallers on the FTSE 100 are M&G (-4.62%), Ocado (-2.38%) and Rolls-Royce (-1.87%).
US Federal Reserve
The Federal Reserve is anticipating stronger than previously forecasted growth this year, as the vaccination roll-out continues apace and the government’s stimulus efforts start having an impact. The US central bank has forecasted growth of around 6.5% this year, an increase of its initial expectation of 4.2% in December.
The Fed also confirmed a brighter outlook for the jobs market on Wednesday. However, the central bank decided against raising interest rates, with most members expecting to keep borrowing costs close to zero until after 2023.
