US stocks ended higher for the second day in a row, as investors responded to comments from Federal Reserve Chair Powell.
He predicted a period of growth below trend due to the central bank's focus on inflation.
Markets are expecting a 75-basis-point hike at the September 20-21 meeting, which could lead to more tightening in the years to come. As Wall Street sheds some of its optimisim towards a potential ease in tightening, a dovish pivot in the near term is less likely.
Kevin Phillip is a partner at Bel Air Investments. The market has underestimated the resolve of the Fed to rein in inflation.
The market closed at 4:30pm on Thursday.
The European Central Bank hiked rates by 75 basis points, the biggest increase in its history, as it tackles persistently high inflation.
The Federal Reserve is expected to raise interest rates by 75 and 50 basis points in September and November. In the past it projected increases of 50 and 25 basis points.
As inflation eases further, the central bank is making a mistake with its rate-hike cycle. The Fed would have to pivot much sooner than the market expects.
China passed the US in corporate debt sales with renminbi-denominated bonds, according to a report.
El-Erian thinks US stocks are poised to do well.
The price of West Texas Intermediate was higher. The international benchmark for oil gained 1.05%.
The gold price fell to $1,708.18 an ounce.
There was a 0.05% increase to $19, 207.67.
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