Wall Street resumed hitting new highs on Wednesday, thanks to the statement of Jerome Powell, the President of the Federal Reserve. The minutes of the Fed published have not brought big surprises in anticipation of a likely monetary boost in late July. The Dow closed up 0.29% to 26.860 pts, the Nasdaq takes 0.75% to 8.202 pts, while the S & P500 has temporarily exceeded the bar of 3,000 pts early in the session, ends up 0.48 % at 2,994 pts.
Certain members of the Federal Reserve have made it clear during the meeting of the Monetary Committee of June 18 and 19 that support measures would be justified soon if the risks were not relaxed. Several others have expressed same opinion, according to the minutes of the meeting: Rates should thus decline to cushion the adverse effects of trade conflicts in which the United States committed and to try to rekindle inflation which still cannot reach the 2% target of the US central bank.
Some Fed members, however, felt that there was no place to raise interest rates and it was better to wait for more information before returning to a more accommodative monetary policy. The members of the central bank also discussed the advantages and disadvantages of possible new tools to control interest rates. A new refinancing facility was even mentioned, whereby financial institutions could exchange government bonds against reserves deposited with the central bank, but no decision was made.
Crude prices are up more than 4%. US stocks of crude oil have indeed declined more than expected last week with the increase in activity of refineries, announced Wednesday the US Energy Information Agency (EIA). Inventories of crude fell by 9.5 million barrels to 458.99 million. Economists expected on average a decrease of 3 million barrels. Gasoline inventories also fell by 1.5 million barrels. Economists were expecting a decline of 1.3 million barrels.
The reserves of distilled products, which include diesel and heating oil, instead increased by 3.7 million barrels while the market anticipated a limited increase to 739,000 barrels.
The August contract on US light crude (WTI) gained 2.60 dollars, to 60.45 dollars per barrel and the Brent, due September, took 2.85 dollars, or 4.4%, to 67 dollars the barrel.
