Wall Street’s main indexes fell on Friday with mixed corporate results, while growth-related stocks pared some of their losses in a turbulent week that saw bond yields rise as investors prepared to raise interest rates.
The Dow Jones Industrial Average fell 65.4 points, or 0.19%, to 34,727.38 points. The Standard & Poor’s 500 index dropped 7.8 points, or 0.18%, to 4,385.83 points, and the Nasdaq Composite Index dropped 5.9 points, or 0.04%, to 13,168.796 points.
On Thursday, US Federal Reserve Chairman Jerome Powell said that a 50-basis-point rate increase “would be an option” at the US central bank’s meeting on May 3-4.
interest increase 0.5%
Powell said a half-percentage point rate increase would be “on the table” when the Fed meets on May 3-4 to approve the next rate hike, in what is expected to be a series of rate hikes this year.
Powell’s comments indicate a set of strong policy actions by the US central bank.
Discussing the global economy at IMF meetings, Powell said that with inflation triple the Federal Reserve’s 2% target, “it would be appropriate to move a little bit more quickly… Fifty basis points will be on the table for the May meeting.”
Powell added that he feels that investors who are now anticipating a series of half-point increases are “generally reacting proportionately” to the board’s emerging battle once morest rising prices.
Associated Contracts
Dealers in contracts linked to the federal funds overnight funds rate now expect the board to raise it to a range of 2.75 to 3 percent by the end of the year, a pace that would involve half-point increases in three future meetings, and quarter-point increases. In the other three sessions of the year.
“We’re really committed to using our tools to bring down inflation,” Powell said, acknowledging that the Fed’s hope for that during the reopening following the coronavirus shutdown has been misplaced so far, to the point that the Fed, for example, no longer counts on help from improved supply chains. Globalism.
“We were expecting inflation to peak at this time and decline over the rest of the year and then more… These expectations have been disappointed in the past. We want to see real progress… We will not count on help from oversupply. We will raise interest rates and quickly get to more neutral levels.” Then we will raise them further if necessary.
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