• The ASX 200 closes 1% higher on Thursday
  • 9 out of 11 ASX sectors rise today
  • Treasurer Jim Chalmers says inflation will peak at 7.75%

Aussie blue chips were up 1% on Thursday after the buy-everything rally on Wall Street overnight sparked by the Fed’s decision to raise its key rate by 75bp.

Dovish comments from Fed boss Jerome Powell also helped to give the markets a sense of relief.

Powell told reporters:

“I don’t think the US is currently in recession. There are too many areas of the economy that are performing too well.”

“We’ve seen the very beginnings of a slight lessening of the tight labor market.”

Powell also said he would not rule out a 75-basis point rate increase for the next meeting, but did say that it will be appropriate to slow rate increases at some point.

Seema Shah, Chief Global Strategist at Principal Global Investors said the Fed’s move last night proved to be one of the most aggressive hiking cycles we’ve seen in recent decades.

“The Federal Reserve’s 75bps increase now means that, in the space of just four months, it has hiked rates by as much as it did over the entire 2015-2018 hiking cycle,” Shah said.

“From here, it is possible that the Fed slows its tightening pace, reassured by the likely peaking of inflation and pullback in inflation expectations as oil prices have fallen.”

Back home, Fed Treasurer Jim Chalmers told Parliament today the economy wasn’t performing as strongly as he had predicted.

This despite some strong data out of the ABS today:

* Export price index rose 10.1% this quarter and 38.7% through the year.
* Import price index rose 4.3% this quarter and 22.1% through the year.

On inflation, Chalmers said:

“It’s already 6.1 per cent through the year to June, and now forecast to peak at 7.75 per cent in the December quarter this year. The current expectation is that it will get worse this year, moderate next year, and normalise the year after.”

To the ASX, where 10 out of 12 sectors were in the green today. Healthcare and Utilities were the two sectors to have fallen. Energy and Miners meanwhile, led the bourse higher.

BIG CAP WINNERS

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Mineral Resources (ASX:MIN) was up 6% after reporting iron ore shipments of 4.7M wmt in Q4. Its full year FY22 iron ore shipments were 19.2M wmt, which was at the upper end of its guidance range of 18.5-19.5M wmt.

Gold Road Resources (ASX:GOR) was up 8% after reporting record production for the June quarter.

85,676 ounces were produced at AISC of $1,250/oz, while record gold sold of 44,526 ounces at $2,496/oz.

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