https://sputnikglobe.com/20230307/dow-jones-down-by-more-than-550-points-on-fears-fed-could-make-bigger-interest-rate-hike-1108158660.html
Dow Jones Down by 575 Points on Fears Fed Could Make Bigger Interest Rate Hike
Dow Jones Down by 575 Points on Fears Fed Could Make Bigger Interest Rate Hike
Sputnik International
US stocks fell dramatically on Tuesday after Jerome Powell, chairman of the US Federal Reserve, hinted that the central bank could significantly raise interest rates in spite of recent slowing of inflation.
2023-03-07T21:01+0000
2023-03-07T21:01+0000
2023-03-07T22:33+0000
economy
nyse
interest rate
us federal reserve
stocks
https://cdn1.img.sputnikglobe.com/img/07e6/05/04/1095272424_0:321:3071:2048_1920x0_80_0_0_567714ac57b74db48660415d8f7574c6.jpg
At closing bell on Tuesday, the Dow Jones had lost 574.98 points from the start of the day, falling 1.72% to finish at 32,856.46. The S&P 500 also declined, falling by 62.05 points to 3,986.37; and the Nasdaq Composite declined by 145.40 points to close at 11,530.33.The day took a turn in the morning after investors heard Powell’s comments about what the Federal Open Market Committee (FOMC) is likely to decide at its meeting later this month. The FOMC consists of the seven Federal Reserve Board members, plus five heads of regional Federal Reserve banks, and sets the course for monetary policy.“If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”At its January-February meeting, the Fed raised interest rates by a slight 25 base points, to 4.57%, although Powell and other Fed leaders have indicated they intend for it to go higher, perhaps above 5.1%. Powell’s comments on Tuesday have many fearing a 50-point increase could come later this month instead of a smaller 25-point hike.US Sen. Elizabeth Warren (D-MA), who opposed the renewal of Powell’s appointment in late 2021, criticized his plan to keep raising interest rates, told the Fed chair at the Tuesday hearing that doing so would put 2 million people out of work.The most recent Consumer Price Index (report for January 2023 found a 6.4% increase in the prices of basic consumer goods from the previous year - the smallest increase seen since late 2021, although still far above the Fed’s target inflation rate of 2%.For nearly a year, the Fed has been aggressively raising interest rates in an effort to stomp out the inflation, which is also described as the depreciating value of the US dollar. The Fed had tolerated rising inflation for years, keeping interest rates low in order to encourage the fastest possible economic recovery from the crash caused by the onset of the COVID-19 pandemic in early 2020, but was compelled to act after inflation hit rates not seen in 40 years.It was still several months before inflation peaked at 9.1% in June 2022, but the rate of increase has declined every month since then.
https://sputnikglobe.com/20230307/yellen-says-climate-change-will-shock-financial-system-in-coming-years-1108157965.html
Sputnik International
feedback@sputniknews.com
+74956456601
MIA „Rossiya Segodnya“
2023
News
en_EN
Sputnik International
feedback@sputniknews.com
+74956456601
MIA „Rossiya Segodnya“
Sputnik International
feedback@sputniknews.com
+74956456601
MIA „Rossiya Segodnya“
us stocks, dow jones, federal reserve, interest rate hike
us stocks, dow jones, federal reserve, interest rate hike
Dow Jones Down by 575 Points on Fears Fed Could Make Bigger Interest Rate Hike
21:01 GMT 07.03.2023 (Updated: 22:33 GMT 07.03.2023) US stocks fell dramatically on Tuesday after Jerome Powell, chairman of the US Federal Reserve, hinted that the central bank could significantly raise interest rates in spite of recent slowing of inflation.
At closing bell on Tuesday, the Dow Jones had lost 574.98 points from the start of the day, falling 1.72% to finish at 32,856.46. The S&P 500 also declined, falling by 62.05 points to 3,986.37; and the Nasdaq Composite declined by 145.40 points to close at 11,530.33.
The day took a turn in the morning after investors heard Powell’s comments about what the Federal Open Market Committee (FOMC) is likely to decide at its meeting later this month. The FOMC consists of the seven Federal Reserve Board members, plus five heads of regional Federal Reserve banks, and sets the course for monetary policy.
“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said on Tuesday ahead of his appearance before the Senate Banking, Housing and Urban Affairs Committee.
“If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”
At its January-February meeting, the Fed
raised interest rates by a slight 25 base points, to 4.57%, although Powell and other Fed leaders have indicated they intend for it to go higher, perhaps above 5.1%. Powell’s comments on Tuesday have many fearing a 50-point increase could come later this month instead of a smaller 25-point hike.
US Sen. Elizabeth Warren (D-MA), who opposed the renewal of Powell’s appointment in late 2021, criticized his plan to keep raising interest rates, told the Fed chair at the Tuesday hearing that doing so would put 2 million people out of work.
“We’re taking the only measures we have to bring inflation down,” Powell replied. “Will working people be better off if we just walk away from our jobs, if inflation remains at 5, 6%?”
The most recent Consumer Price Index
(report for January 2023 found a 6.4% increase in the prices of basic consumer goods from the previous year - the smallest increase seen since late 2021, although still far above the Fed’s target inflation rate of 2%.
For nearly a year, the Fed has been aggressively raising interest rates in an effort to stomp out the inflation, which is also described as the depreciating value of the US dollar. The Fed had tolerated rising inflation for years, keeping interest rates low in order to encourage the fastest possible economic recovery from the crash caused by the onset of the COVID-19 pandemic in early 2020, but was compelled to act after inflation hit rates not seen in 40 years.
It was still several months before inflation peaked at 9.1% in June 2022, but the rate of increase has declined every month since then.
