was the hang seng, driven by tech stocks. let s take a breath. live now to michael hewson, chief market analyst, cmc markets. it s been an interesting month orso it s been an interesting month or so across may. lots of bank holidays, notjust in the uk but abroad as well. in the us, asia too. how is the trading picture shaping up at the moment? i picture shaping up at the moment? moment? i think the big discussion moment? i think the big discussion at moment? i think the big discussion at the - moment? i think the big i discussion at the moment, victoria, is about the next move for central bank rates. there has been a growing shift, i think you could call it, that we might see a pause in the fed s rate hiking cycle when they meet onjune 14th. there is an awful lot of moving parts to past between now and then. passed between now and then. it s a very low possibility that that was going to play out
here in europe i think that the attention has now shifted a bit away from the fed and towards european centralmeets t. but the same question is how close to the end of their rate hiking cycle they are. ecb is expected to raise rates again today and inflation still high at 7%, but core inflation data this week has dropped just a little bit. so that may be factor ed in there. banks are pretty mixed. still scrutiny on the sector because of the continuing turmoil we re seeing in the u.s. regional banks. pac west shares falling by about a half on that report that they could be considering strategic options. and i think rate centers here in europe will be looking to the fed and that turmoil in the u.s. regional banks as a cautionary tail when they make their decision today. and one thing the fed chief
slowing economy, it is how and where the economy is slowing that could give us a sense of what is ahead. mark zandi from moody s telling me thursday usually it is the consumer that pulls back and the businesses respond. this go round the thing that feels a little uncomfortable is if we go into a recession, it will probably be businesses pulling back and forcing consumers to follow. and in other words, businesses pull back, stop hiring, layoff workers and thus spark a recession. all eyes now on the federal reserve, it meets for its next policy meeting next week. and zandi expects another rate hike but they have enough evidence to a slowdown so it could mean an end to the rate hiking cycle. still ahead, south korea s president addresses the u.s. congress warning that the countries must present a united front against threats from north korea. and after 20 years in the u.s., a giant panda is back at
picture for the economy and sets up a very challenging policy environment for the fed. meaning what in terms of the likelihood that it raises interest rates again? well, the fed is very likely, the market s widely anticipating the fed raised its rates by a quarter point next week when it convened on wednesday. what the markets are hoping for is that the fed signals at that point, they re like, okay, we ve really come a long way in the inflation fight. we re going to take a break now and see how our policy works for the economy, and hopefully inflation comes down. what would be the scary part about that is if the fed decides we re still worried about inflation, and they don t signal lower rates ahead or at least a little bit of a break in the rate hiking cycle. that could be problematic, and the data indicates that the fed has more work to do when it comes to the inflation fight. absolutely, that will be welcome news particularly for the housing industry and other sectors. thank y
after a long period people have realised that keeping inflation low and stable in the long run is better for low and stable in the long run is betterfor economic low and stable in the long run is better for economic growth and jerome powell was clear about this. yesterday evening he said that the cost of getting inflation down may be significant but the cost of not getting inflation down may be even greater. 50 getting inflation down may be even greater. getting inflation down may be even greater. so how concerned are ou, even greater. so how concerned are you. just even greater. so how concerned are you, just briefly even greater. so how concerned are you, just briefly before - even greater. so how concerned are you, just briefly before we l are you, just briefly before we move onto the uk, how concerned you about the state of the us economy and where it is headed west i don t think there have been any surprises recently but the fact of the matter is that the fact of the matter i