Wall Street got what it expected: another three-quarter rate hike from the Federal Reserve.
But it was comments from Fed Chair Jerome Powell that managed to shake the markets, leading to a 505-point loss for the Dow Jones Industrial Average and 3.36% drop for the Nasdaq Composite. Stocks surged initially after the central bank's statement alluded to a potential policy shift, until Powell's press conference commenced. |
"We still have some ways to go and incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected," Powell said. He also called discussion of a pause in hiking "premature," leaving the door open to another large increase come December.
“Chairman Powell made it clear that his bias is to err on the side of over-tightening rather than under-tightening in order to avoid the risk of inflation becoming entrenched,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management. “At the end of the day, it’s going to come down to inflation and labor market data in the coming months and quarters.” |
