Markets Resilient Despite Hawkish Central Banks

This week was marked by corporate earnings and central bank decisions that kept markets resilient despite some hawkish tones from policymakers.

The Federal Reserve left interest rates unchanged for a fifth consecutive meeting, but investors noted a more divided stance within the Federal Open Market Committee, with three members voting in favour of a further rate increase.

The Fed acknowledged solid economic growth, stable employment conditions, and improved productivity, although inflation remains above its long-term target.

The Bank of England also left rates unchanged, but the Monetary Policy Committee's six-three voting split was slightly more hawkish than expected. Governor Andrew Bailey highlighted signs of a softening labour market and suggested inflation could peak later this year.

Corporate earnings were again the main support for markets throughout the week. In the US, technology sector companies including Microsoft, Amazon, and Apple exceeded expectations, while Meta disappointed investors with weaker guidance and lower cash generation.