The renewal of Jerome Powell at the head of the American central bank (Fed) to fight, in particular, against inflation, seems to have pleased the Asian markets. Tuesday, November 23, for the very first time in over four years, the dollar thus delivered a good performance, exceeding the 115 yen mark when the markets opened. The American currency thus reached 115.10 yen in the first exchanges. This is its highest level since March 2017. Joe Biden’s decision to stick with Jerome Powell has led to a bet that the bank will cut its massive bond purchase program faster than expected.
And this, while some analysts predict that it will jump up to three times interest rates before the end of next year. The prospect of tightening monetary policy has hit US markets with all three major indices dropping from their daily highs. The Dow Jones finished slightly higher, but the S&P 500 and the Nasdaq lost more than one percent.
“The re-appointment of Mr. Powell removes a potential negative element from the markets and provides the certainty that investors need,” said George Ball, of financial services firm Sanders Morris Harris, nonetheless.