US Federal Reserve triggers serious decline at European market

The recent statement from Jerome Powell, the head of the US Federal Reserve System, about Washington's readiness to further tighten monetary policy brought European markets down.

In trading on Monday, August 29, all sectors and major exchanges went negative, and technology stocks lost almost 1.7 percent, CNBC said.

• Germany's DAX index fell more than 1.1 percent,
• France's CAC 40 index lost about the same amount,
• Italy's FTSE MIB fell by about one percent.

Market changes occur as investors think over Powell's comments that he made at a conference of leading central banks. Powell announced that the Fed was ready to continue raising interest rates to curb inflation. At the same time, the rate should reach a level that would limit economic activity and stay on that level for some time to slow down the pace of consumer price growth.

Against such a background, the yield on two-year US Treasury bonds rose by eight basis points to 3.48 percent (the highest since the eve of the 2008 crisis), and the yield on ten-year securities increased by the same amount to 3.13 percent. In addition, Australia's 10-year bond yield soared by 14 basis points to 3.72 percent and New Zealand's yield went 10 basis points up to 3.98 percent.