FTSE and US markets rise as Jerome Powell signals Fed rate rises

How major markets are performing on Friday

FTSE U.S. Federal Reserve Chair Jerome Powell attends a press conference in Washington, D.C., the United States, on July 26, 2023. The U.S. Federal Reserve on Wednesday raised its benchmark interest rates by 25 basis points to the range of 5.25-5.5 percent, the highest level in over two decades, as it continues to ramp up its fight against inflation. (Photo by Aaron Schwartz/Xinhua via Getty Images)
US Federal Reserve chair Jerome Powell is set to speak at the Jackson Hole meeting of central bankers on Friday. The FTSE was up. Photo: Aaron Schwartz/Xinhua via Getty

The FTSE 100 rose on Friday as US Federal Reserve chair Jerome Powell's said the central bank is "prepared to raise rates further" as it continues its fight to bring inflation back to its 2% target.

The FTSE (^FTSE) was up 0.5% by the afternoon, while the Dax (^GDAXI) rose 0.4% and the Cac (^FCHI) was up 0.6%.

The S&P 500 (^GSPC) was up 0.5%, the Dow (^DJI) rose 0.6% and the Nasdaq (^IXIC) was 0.5% higher, reversing some of the losses made on Thursday.

Speaking at the Jackson Hole Economic Symposium in Jackson, Wyoming, Powell reiterated his message to markets from a year ago: The Fed is going to bring down inflation one way or another.

"At last year's Jackson Hole symposium, I delivered a brief, direct message," Powell said. "My remarks this year will be a bit longer, but the message is the same: It is the Fed's job to bring inflation down to our 2 percent goal, and we will do so."

Meanwhile, the UK's energy regulator Ofgem cut the price cap for energy bills.

The energy price cap is to fall to £1,923 for the usage of a typical household, according to Ofgem — a measure which will come into effect from October to December. The cap is expected to go up again for January.

It had been set at £2,074 for July to September.

Although this seems like a good thing, the Resolution Foundation notes that the headline £200-a-year saving for a typical household masks a lot of variation, with the heaviest energy users in line for larger reductions in bills, and some households who use relatively little energy set to see bills rise this winter compared to last year.

Read more: Cost of living: Ofcom asked to investigate Virgin Media price hikes

Stay with us for live updates:

Watch: What is the energy price cap – and how will it affect my bills?

Download the Yahoo Finance app, available for Apple and Android.