The US30 index is nearing the resistance from February after inflation dropped to 5%.
US30 – Daily Chart
US30 is trading near the 34,000 level after another move higher on Wednesday, and the resistance is at 34,358.
Inflation in the United States fell more than analysts’ expectations to 5%, with 5.2% expected. Inflation is now at its lowest level in the country since 2021. That will give investors hope that the aggressive rate hike path of the Federal Reserve has now reached its peak.
BOE Governor and Warren Buffet See No Banking Crisis
Meanwhile, Bank of England governor Andrew Bailey told an audience in Washington DC, “I don’t believe we face a systemic banking crisis”, ahead of a meeting of the IMF and the World Bank. Bailey said the BoE had not altered its monetary policy, a hint that interest rate rises could continue due to problematic inflation. “The post-crisis reforms to bank regulation have worked,” he said. “Today, I do not believe we face a systemic banking crisis. When I look at the UK banks, they are well capitalised, liquid, and able to serve their customers and support the economy”.
Meanwhile, Warren Buffett has said there could be more bank failures later. Still, he believes depositors should be fine with losing their money.
During an interview with CNBC, Buffett said that banks had made “dumb mistakes” but that it was not like the financial crisis in 2008.
“We’re not over bank failures,” Buffett said. But people “do not need to be panicked” about the industry, and “nobody is going to lose money on a deposit in a US bank”.
Buffett stressed that shareholders could lose out from bad management decisions. Still, the FDIC backstop meant that panic was not warranted. The comments from Bailey and Buffett could see increased confidence from investors to buy up US banking stocks.
The US30 index is still pushing higher but faces critical resistance at the highs of February.
