Posted on 09/21/2022 1:10:22 PM PDT by Signalman
Stocks fell in volatile trading Wednesday after the Federal Reserve raised rates by three-quarters of a point and forecast more sizable rate hikes in its fight against inflation, actions widely expected by traders.
With the S&P 500 down more than 8% in the past month and 18% for 2022 heading into Wednesday’s Fed actions, stocks were already pricing in an aggressive tightening campaign by the Fed that could push the economy into a recession.
The Dow Jones Industrial Average last traded 294 points lower, or 0.9%, after being up as much as 314 points. The S&P 500 dipped 0.7%, and the Nasdaq Composite traded 0.7% lower.
Stocks were volatile as traders parsed through the rate decision and the latest comments from Powell’s press conference.
The Fed raised rates by the widely expected 75 basis points and said it expects its so-called terminal rate to reach 4.6% to fight persistently high U.S. inflation. That’s the rate at which the central bank will end its tightening regime. The central bank also indicated that it plans to stay aggressive, hiking rates to 4.4% by next year.
“You can only steer the ship towards the storm for so long, but eventually there comes a time when you need to batten down the hatches and with the Fed’s third consecutive 75 basis point rate hike over the past four months, market participants should be looking for cover to weather the upcoming storm,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.
Treasury yields popped on the news. The 2-year rate, which hit its highest level since 2007, last traded at around 4.1%. The 10-year rate jumped to about 3.6%.
All major S&P 500 sectors finished the session in negative territory, led to the downside by consumer discretionary and communication services.
I moved my (very) little in a 403(b) before 2008. Made a small amount as I put it all in bonds. Had to cash it in 2008 and take the hit.
I just cashed the last $500 last year to get it on 2021 taxes. Good thing I did (they withheld $100 plus). I only had to pay $200 additional (overall) in taxes this year (for last year).
There’s no way to save this $201 trillion in debt and unfunded liabilities.
To call the latest fiasco The Inflation Reduction Act shows it’s targeted at the fools who watch CNN and MSNBC.
The stupid - it burns.
The Stock Market can’t see two weeks into the future?
Praying for the midterms. A GOP House and Senate will not cure everything but it might keep the libs from making it worse.
Monetary tools cannot fix a fiscal disaster, but it’s all they’ve got. “Kill the economy to save it.”
Why raise the rate?? We already have Biden’s Inflation Reduction Act in place!
I would guess that there will be at the very least $50,000 taxpayer dollars spent on each one, per year.
10,000,000 x 50,000= OH S**T!😳
Just keep those US Treasury printing presses rolling, 'cause we know printing money out of thin air doesn't contribute to inflation./sarc
Fed doing their part to ruin the country.
Down $6,000 since the first of the year.
Layoffs coming.
And the hikes will crater a good many businesses that relied on cheap money.
Most people did through out history.
The idea of a second childhood, where someone else took care of you as you play is a new thing for the average person.
As is living past 60 or so.
Exactly. Biden war on energy is THE root cause of all inflation. Criminal.
That’s pretty much my take. In my line of work, inflation has been mostly driven by lack of supply of goods, not so much by increases in demand. Then made worse by gas prices, oodles of government spending, and now labor price hikes will increase demand putting a floor on inflation for a while to come. Month over month inflation rates may moderate but year over year number is going to take a while to see meaningful retreat.
Supply chain issues are the result of worldwide “lockdown” limiting supply of goods. Throw in energy prices and wage increases for what’s driving service sector inflation.
Powell pretty much said he wants to send us into a recession - he expects and wants housing prices to drop and unemployment to rise.
Yep, and the current “business models” fall right into the same agenda and bigger picture. Even if there is not a shortage they will manufacture one with policy. It is all about putting us into a 3rd world status living around campfires.
So... Here is what I figured out... Since there is no one brave enough to stand up against it then it is indeed going to happen.
So... I can wait and get caught with my pants down or start denying then the satisfaction right now on MY terms and not wait for their terms.
how? become as practical as possible like moving into a mobile RV, and not spend one dime more than I absolutely do not need to spend.
The end is the same anyhow. But mine now is by choice and I am not facilitating feeding the machine. I can sleep at night knowing I am doing everything possible to starve them.
There is no law that we have too.
I apologize, but I do not track the various stock market indexes. How far have they dropped since Nov 1 2020?
Thursday looks to be another down day. The market was up earlier in the day before the FED announcement. I am thinking it will start to go up later in the day.
It will be 6 weeks before the next FED rate hike and that is about 1 week before the Nov 8 election. I hope the stocks go up and up to at least where they were 1 month ago.
I wonder if it will be a small hike or none at all just to help the democrats.
agree
Waiting for the NEEDLESS layoffs, forclosures and the suffering of the young in general all done to please old farts afraid of inflation.....
They don’t HAVE to raise interest rates.
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