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Jay Powell, chair of the Federal Reserve, yesterday refused to rule out more aggressive interest rate rises than markets had been expecting as he all but confirmed the first increase would be implemented in March.
Powell dodged a question on whether the Fed could raise rates at every subsequent meeting this year, which would amount to seven increases in 2022. Instead, he said the central bank would be “humble and nimble” and “guided by the data”.
Last month, the central bank’s policymakers released projections that implied three rate rises this year.
Powell’s hawkish stance at a press conference following the Fed’s January meeting sparked a sharp stock market sell-off. The benchmark S&P 500 index closed down 0.1 per cent for the day while the technology-heavy Nasdaq Composite closed flat, reversing an earlier rally of as much as 3.4 per cent.
Opinion: By abandoning a systemic framework for monetary policy, the central bank has spawned an all-asset speculative bubble, writes John Hussman.
Has the Fed made a policy error? Do investors have reason to worry? Share your thoughts with us at firstft@ft.com. Thanks for reading FirstFT Europe/Africa. Here’s the rest of today’s news — Jennifer
Five more stories in the news
1. CVC plans overhaul to keep lucrative profit stream private Europe’s largest private equity firm plans to overhaul its operations as part of a potential initial public offering, a move that would keep in private hands most or all of the lucrative profits it makes buying and selling companies.
2. Rishi Sunak’s Budget drove up inflation: MPs The UK chancellor’s latest tax-raising Budget has contributed to a rise in inflation and there is a risk that government policy could generate a wage price spiral, according to an influential all-party group of MPs.
3. West commits to keeping Nato open to new members The US and Nato told Moscow they were committed to keeping the transatlantic alliance open to new members, rebuffing a central Russian security demand that could determine the outcome of the Ukraine crisis.
Related read: The European Central Bank has warned lenders with exposure to Russia to prepare for international sanctions in case of an invasion. Separately, the Port of Mariupol has become a target should Vladimir Putin choose to attack Ukraine again. Here’s what the residents have to say.
4. Deloitte introduces flexible public holidays for UK staff The Big Four professional services firm will allow its 22,000 UK employees to take time off on the dates “most meaningful to them” as part of a drive to improve diversity and inclusion.
5. Amazon abandons employee influence campaign Amazon has abandoned its much-maligned campaign of paying employees to share positive messages on social media, scrubbing online messages that were meant to improve the tech giant’s image to potential workers it needs to continue growing.
Amazon started the social media scheme in an effort to combat growing hostility over conditions at its fulfilment centres © FT montage/Twitter
Coronavirus digest
Boris Johnson yesterday vowed he would not quit as UK prime minister as he prepared to receive a critical report into lockdown-breaking parties.
Denmark said it would lift almost all Covid-19 curbs and remove the legal basis for introducing more restrictions.
Tesla reported a record $2.3bn net profit for the fourth quarter of 2021 but warned supply constraints would weigh on its results “through 2022”. A crisis in obtaining chips is also posing headwinds as Apple prepares to report record profits today.
China’s president Xi Jinping met Thomas Bach, president of the International Olympic Committee, to discuss the Games’ Covid prevention measures.
Japan’s tight border restrictions are endangering foreign investment and undermining efforts to promote Tokyo as a global financial hub, international business has warned.
Supply chain bottlenecks and weak household spending have turned Germany from Europe’s economic locomotive into its laggard.
What can we make of the IMF’s gloomy forecast for 2022? Martin Wolf explains.
The day ahead
Germany consumer confidence GfK’s consumer confidence survey for February will give an indication of the impact of the country’s strict coronavirus lockdown on spending.
Corporate earnings It’s a big day for earnings. The calendar includes Apple, Comcast, Deutsche Bank, easyJet, Diageo, LVMH, Mastercard, McDonald’s, Samsung Electronics, SAP and Visa. There are also trading updates from CVS for the first half, Fevertree for the full year and Mitie for the third quarter.
Honduras’s new president Xiomara Castro will be sworn in as the nation’s first female president after a high-turnout landslide in November.
International Holocaust Remembrance Day Today marks the 77th anniversary of the liberation of the Nazi German concentration camp Auschwitz. Earlier this month, the FT’s Sarah Ebner reflected on her experience obtaining a European passport after Austrian citizenship was restored to families of Nazi victims.
Join us for the FT’s Future of Business Education: Spotlight on MBA, a guide to educating global business leaders. This event offers both young professionals and executives an opportunity to learn how to enhance their skills and accelerate their careers through an MBA. Register here.
What else we’re reading and watching
Has appetite for plant-based meat peaked? Consumer interest in plant-based meats surged around the flotation of US start-up Beyond Meat in 2019. But sales growth is falling in the US and the UK. Investment is continuing, with $3bn raised in 2021 — but are products failing to meet taste expectations?
BlackRock’s active strategies BlackRock’s stockpickers are accustomed to toiling in the shadow of the group’s exchange-traded fund business, which sucked in more than $1bn a day on average last year from investors. While passive funds still dominate the show, efforts to revive its actively-managed funds are beginning to pay off.
International investors in Chinese companies face growing risks As property companies such as Evergrande teeter on the brink of collapse and Beijing cracks down on the tech sector, are the opportunities to make money worth the growing political risk? The FT’s global China editor James Kynge and markets editor Katie Martin discuss.
Video: International investors in Chinese companies face growing risks
Who is Bola Ahmed Tinubu, the ‘godfather’ of Lagos? The 69-year-old has solidified his status as the most powerful man in the commercial engine of Africa’s largest economy. But his success also made clear the challenges he faces as he runs for Nigeria’s presidency in 2023: his age in a country where almost two-thirds are under 24.
When an activist investor attack is no bad thing Activist investor demands, such as those at Unilever and Peloton, can spur self-satisfied executives to action, pressure boards into dealing with incompetent managers and question poorly thought out mergers and acquisitions. All of this is badly needed right now, argues Brooke Masters.
Work and careers
Hybrid work is polarising. But why? In this episode of the Working It podcast, Isabel Berwick talks to Camilla Cavendish and Pilita Clark about the most divisive topic in workplaces: whether it is time to put an end to homeworking.
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