U.S. benchmark equity indexes closed lower on Thursday as markets digested comments from Federal Reserve Chair Jerome Powell. The Federal Open Market Committee is not in a hurry to lower interest rates and can act 'carefully,' Powell indicated in prepared remarks before a live discussion hosted by the Dallas Fed and the Dallas Regional Chamber. 'The economy is not sending any signals that we need to be in a hurry to lower rates,' Powell stated.
'The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully. Ultimately, the path of the policy rate will depend on how the incoming data and the economic outlook evolve.' The U.S. producer price growth in October showed an acceleration from September, reflecting a rebound in wholesale costs of goods, according to the Bureau of Labor Statistics.
U.S. consumer inflation also increased in line with market expectations during the previous month. 'We see that the details from the Consumer Price Index and the Producer Price Index reports this week indicate that prices rose at a faster pace in October, but they do not suggest accelerating inflation,' noted Oxford Economics. Meanwhile, the likelihood of policymakers lowering their benchmark lending rate by 25 basis points next month dropped to 75% on Thursday, down from 83% the previous day, based on the CME FedWatch tool.
The probability that interest rates will remain unchanged increased to 25%. In the oil markets, December West Texas Intermediate crude oil rose by $0.27, closing at $68.70 per barrel. January Brent crude, the global benchmark, was last seen up $0.24, reaching $72.52, despite a report showing a larger-than-expected increase in U.S.
oil inventories. The International Energy Agency maintained its 2024 demand forecast, expecting supply to exceed demand next year due to rising non-OPEC production. In the corporate arena, Walt Disney's fiscal Q4 results surpassed market expectations, driven by its streaming business. The media and entertainment giant anticipates adjusted earnings growth for fiscal 2025, leading to a 6.2% increase in its shares..