- US equity futures fell, indicating that Wall Street's recovery may be stalled as traders weigh hawkish comments from Federal Reserve Chair Powell. Treasury yields fell slightly, and the dollar ended a three-day losing streak.
- Contracts for all major US benchmarks were lower after the S&P 500 gained 2% in a risk rebound on Tuesday. Powell stated that the Fed will not hesitate to tighten policy beyond neutral to combat high inflation, fueling concerns that higher interest rates and surging inflation will drive the economy into a recession.
- Risk sentiment is regaining strength despite tightening monetary conditions, Russia's war in Ukraine, and China's covid lockdowns. In his most hawkish remarks to date, Powell stated that the US Federal Reserve will raise interest rates until there is clear and convincing evidence that inflation is declining.
- ECB's Rehn: Acceleration of wage inflation is now the most critical factor in determining the path of monetary policy.
- ECB's Rehn: ECB's June GDP growth forecast is likely to be closer to the adverse and severe scenario of 2% than the baseline of 3.7%.
- Finland and Sweden submit applications to join NATO.
