US indices finished yesterday's trading lower following the hawkish FOMC minutes release with the S&P 500 dropping 0.97%, Dow Jones falling 0.42% and Nasdaq pulling back 2.22%. The document showed that many Fed members were opting for a 50 basis point rate hike in March and signaled that QT is likely to start in May with monthly limits for reduction at $60 billion for Treasuries and $35 billion for mortgage-backed securities. A strong hawkish message sent by FOMC minutes exerted some pressure on indices with the tech sector, which is viewed to be the most vulnerable to changes in the level of rates, took a significant hit. While central banks have been at the center of attention in recent weeks, the ongoing Russia-Ukraine conflict continues to be a critical situation which could cause some unexpected moves across markets. On the other hand, investors await today’s ECB minutes which may cause some short term volatility across european stocks and indices as the bank attempts to mitigate the risks of the ongoing conflict.
UK house prices reach new record high
The Halifax HPI index continued to highlight the recent trend of rising prices across sectors with another increase in house prices and monthly house price growth of 1.4%, the biggest increase for six months. The average property price reached another new record high of £282,753 and after two years from the first lockdown, house prices have now risen by £43,577. While prices in other sectors like energy and food have been consistently increasing, the housing market may begin to suffer a slowdown in demand if the current rate of increase continues as more consumers start to struggle to enter the market. On the other hand, demand at current levels remains high and could sustain a continuation of this trend despite measures by the central bank designed to mitigate widespread inflation.