With the Federal Reserve’s rate-hike decision in the rear-view mirror, investors set their sights on what the aggressive increase means for the economy going forward. Stocks slipped Thursday and yields climbed as markets digested the rate hike and expectations of even higher interest rates. These mounting fears pushed technology and consumer discretionary names lower. Caesars Entertainment's stock also slumped, dropping more than more than 9%, on fears that an economic slowdown could hurt travel. Caesars was the biggest S&P 500 laggard. |
Many analysts and investors are growing worried that the Fed will tip the economy into a recession as it works to curb rising inflation.
How long that lasts, however, may be entirely up to the Fed.
“Our central market view has been that until the economy either enters a clear recession or shows sustained signs of progress on inflation, the pressure for tighter financial conditions is unlikely to abate and periods of relief are unlikely to be sustained,” wrote Goldman Sachs’ Jan Hatzius in a note to clients Thursday. |
