Stocks drop, dollar gains as Powell says Fed is not looking at negative rates.


Tuesday's sell-off in equities continued on Wednesday, and the SP500 and Dow Jones indices were trading half a percent lower, while the tech Nasdaq 100 index fought to stay in positive territory.

Stocks declined notably after Jerome Powell responded to a question from Adam Posen, saying that the FOMC's view on negative rates has not changed and even though Powell knows "there are fans of negative rates, evidence of the effectiveness of negative rates very mixed" and as a result "negative rates is not something we are looking at."

The greenback rose after his remarks, while gold initially slipped, but managed to erase all the losses. 

Moreover, Powell said that the economic outlook is highly uncertain, and downside risks are significant. He reiterated that monetary policy couldn't solve everything, and more fiscal help is needed. 

Meanwhile, the US retirement investment board said has delayed the transition of 40 billion USD international fund to track the MSCI index, including controversial Chinese companies. According to a statement, it was citing COVID-19 and new board nominations as being behind the delay.

While this is a delay, not a cancellation, it could still have an impact on Chinese companies, among others, from the suspension.
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