The IMF/World Bank Meetings to Test Risk Appetite as Fed Hawks Swoon

Last week's US economic figures exceeded forecasts. The US employment data and higher-than-expected ISM Non-Manufacturing PMI statistics allowed the Fed to raise interest rates by 75 basis points in November. The World Bank and IMF have been keeping an eye on central bank and economic activities.

Since the Jackson Hole Symposium, the Fed has maintained its stance. Fed Chair Powell issued a warning in August about the Fed's commitment to achieving the target inflation rate.

Powell also dispelled any expectations of a policy change at the time by warning the markets that inflation would need to be controlled by a protracted period of below-trend growth and a weaker labor market.

The Jackson Hole speech's response from the market was identical to that of Friday's employment data. The Powell speech resulted in a 3.94% decline in the NASDAQ 100. In reaction to an increase in hiring and a drop in the US unemployment rate to 3.5% last Friday, the NASDAQ fell by 3.80%.

The cryptocurrency market, which fell by $78 billion in reaction to Powell's speech and $11.5 billion in response to the employment data, experienced a distinct situation. Notably, the employment data offers the Fed leeway to aggressively front load rates. The crypto market was more affected by US inflation data.