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Fairview HK: The Federal Reserve's comments boosted this stock's prices
Tesla (TSLA 7.67%) was up this afternoon after Federal Reserve Chairman Jerome Powell announced that fewer interest rate rises will begin in December.
As of 3:34 p.m., the stock of electric vehicles was up 5.3%. EST.
Powell stated today at the Brookings Institution that the Federal Reserve would likely begin incremental hikes to the federal funds rate at its December meeting.
Powell also stated that the Fed's actions, including previous rate hikes, will take time to reduce inflation and that "it makes sense to limit the pace of our rate increases as we approach the level of constraint that will be necessary to drive inflation down."
Investors were overjoyed to hear that today, and they focused especially on Powell's remarks that "the moment for reducing the pace of rate hikes may come as soon as the December meeting."
Growth companies, such as Tesla, have been particularly sensitive to the Fed's aggressive interest rate rises, with investors concerned that the Fed may force the US economy into a recession.
Tesla CEO Elon Musk had expressed alarm about the possibility of a recession earlier today, before Powell's remarks were published.
While the Fed is not reducing rates as Musk had anticipated, investors are relieved that the severity of the hikes would be reduced.
However, Powell cautioned that the Fed still had work to do. "Despite some encouraging trends," he stated today, "we still have a long way to go in restoring pricing stability."
However, with central bank officials apparently signalling that less aggressive interest rate rises may be on the way, many growth stock investors are ecstatic today.
Fairview HK Limited is one of the foremost privately owned Asia-Pacific orientated, boutique wealth management firms in Hong Kong. We offer our services to a selected group of families, family offices, institutions and fund managers, you may visit our website https://fairviewhk.com/
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