Source: Sharecast
The pan-regional Stoxx 600 index finished 0.57% higher at just below 547 points with major regional bourses following suit.
US interest rates are more likely to be higher over the longer term as the global economy faces more frequent and persistent supply shocks, Powell said in a speech on Thursday.
In a speech on the Fed's first policy framework review since mid-2020, Powell said the economic environment "has changed significantly" since then and the central bank's stance would "reflect our assessment of those changes".
Following the Covid pandemic central banks around the world forecast that inflation would "subside fairly quickly in 2022", when this did not happen the Fed hiked rates by 525 basis points over 16 months, he added.
“Higher real rates may also reflect the possibility that inflation could be more volatile going forward than in the inter-crisis period of the 2010s. We may be entering a period of more frequent, and potentially more persistent, supply shocks — a difficult challenge for the economy and for central banks,” Powell said.
In economic news, European Union statistics body Eurostat cut its estimate for eurozone growth in the first quarter of the year to 0.3%, down from its initial estimate last month of 0.4% growth.
Industrial production unexpectedly soared in the Eurozone in March, official data showed on Thursday, boosted by strong demand from the US and a resurgent Germany.
According to Eurostat, the statistical office of the European Union, manufacturing output rose 2.6% in the Eurozone and by 1.9% across the wider bloc.
Analysts had been expecting a notably more modest 1.8% uplift. Industrial production rose 1.1% in February in the Eurozone.
Britain’s economy posted a surprise 0.7% expansion in the first quarter, although economists warned that they expected growth to moderate later in the year after the impact of US tariffs became clearer.
Oil prices dropped more than 3.5% to just above $60 a barrel on a potential U.S.-Iran nuclear deal that could ease sanctions and boost supply of crude. The news hit oil majors, with BP and Shell both down.
On the equities front, Serco shares jumped as the UK government contractor won three deals worth more than £1bn with the Royal Navy.
German arms makers Hensoldt and Rheinmetall both jumped as German Foreign Minister Johann Wadephul echoed US President Donald Trump’s call for NATO members lift defence spending targets to 5% of domestic GDP.
Shares in Ubisoft tanked by almost a fifth as the French video game-maker reported that net bookings — fell 20.5% in the latest fiscal year.
Merck fell as the German pharmaceutical company cut its full-year outlook on Thursday amid macroeconomic and geopolitical uncertainty and foreign-exchange headwinds.
3i fell after posting results and Siemens was also down despite forecasting an increase in full-year sales by between 3% - 7% as it reported better-than-expected profit during its second quarter.
Thyssenkrupp slumped by 11.68% after the engineering group's second-quarter operating profit plunged.
Reporting by Frank Prenesti for Sharecast.com