S&P 500 Dow Nasdaq dip on disappointment Fed expects more rate hikes
Stocks started the day lower on Wall Street and Treasury yields are again bumping up against multiyear highs a day after the Federal Reserve indicated that its fight against inflation is far from over. The yield on the 10-year Treasury note, which influences mortgage rates, rose to 4.20%. He suggested the pace of rate hikes may slow in coming months but that the ultimate level that the fed funds rate may have to reach could be higher than previously thought, souring the mood on Wall Street.
Stocks started the day lower on Wall Street and Treasury yields are again bumping up against multiyear highs a day after the Federal Reserve indicated that its fight against inflation is far from over.The S&P 500 fell 1% in the early going, as did the Nasdaq composite. The Dow was off 0.6%. The yield on the 10-year Treasury note, which influences mortgage rates , rose to 4.20%. Mortgage rates have more than doubled this year.Across the Atlantic, the Bank of England made its biggest interest rate increase in three decades. European markets were lower and Asian markets closed slightly lower.The Fed raised its benchmark fed funds rate by 0.75 percentage point on Wednesday, as expected. Stocks initially rallied on the news until Fed Chairman Jerome Powell said in his press conference that the Fed’s job in fighting inflation was far from over. He suggested the pace of rate hikes may slow in coming months but that the ultimate level that the fed funds rate may have to reach could be higher than previously thought, souring the mood on Wall Street .In September, the Fed had a median projection for the fed funds rate to hit 4.4% this year and then peak at 4.6% in 2023 before heading lower. After Powell’s comments though late Wednesday, the market is looking for fed funds to reach at least 5% before heading lower. After Wednesday’s move, the fed funds target range sits at 3.75%-4%, the highest level since 2008.
