Traders in the stock market took some time to decide, but it was evident that they did not enjoy what they heard from the Federal Reserve and its chairman Jerome Powell whenever the final bell rang on Wednesday.
Researchers’ claim
Central bankers also projected the interest rate benchmark to increase by 125 basis points by year’s end, reaching a midpoint of 4.4% and a terminal rate, or peak, of 4.6% in 2023. Rate reductions are not anticipated until 2024. Researchers claimed that the forecasts and Powell’s remarks emphasized the same point he made in a presentation at a conference on financial regulation in Jackson Hole, Wyoming, at the end of August: the Fed wants to continue tightening it until it brings inflation in check.
The Dow Jones Industrial Average DJIA, -1.70%, finished the day at 30,183.78 after losing more than 500 points, or 1.7%. To reach 3,789.93, the S&P 500 SPX, -1.71% dropped 1.7%. At 11,220.19, the Nasdaq Composite COMP, -1.79% decreased 1.8%.
The year-over-year rate
According to the August consumer price index report published this past week, inflation has become more pervasive throughout the economy. The year-over-year rate has decreased to 8.3%, less than anticipated. At his presentation in Jackson Hole, Powell forewarned that now the company’s more aggressive efforts to reduce prices would cause some pain to the business and households.
As per Dow Jones
The announcement of the report caused tumultuous trade in other capital markets. As per Dow Jones Market Data, the yield on the 10-year Treasury, TMUBMUSD10Y, decreased by five basis points to 3.511% from 3.541%. Gold for shipment in December on the Comex, GCZ22, -0.42% GC00, -0.42% gained $4.60, or 0.3%, to settle at $1675.70per ounce. The ICE U.S. Dollar Index DXY, 0.81%, a measure of the dollar’s value vs. a group of competitor currencies, increased by 1% as Russian President Vladimir Putin intensified the conflict in Ukraine by ordering conscripts to mobilize and making comments viewed as threatening to deploy nuclear weapons.
