{"id":48750,"date":"2022-06-13T14:46:18","date_gmt":"2022-06-13T14:46:18","guid":{"rendered":"https:\/\/harchi90.com\/dow-sinks-sharply-as-wall-street-worries-about-drastic-action-from-the-fed\/"},"modified":"2022-06-13T14:46:18","modified_gmt":"2022-06-13T14:46:18","slug":"dow-sinks-sharply-as-wall-street-worries-about-drastic-action-from-the-fed","status":"publish","type":"post","link":"https:\/\/harchi90.com\/dow-sinks-sharply-as-wall-street-worries-about-drastic-action-from-the-fed\/","title":{"rendered":"Dow sinks sharply as Wall Street worries about drastic action from the Fed"},"content":{"rendered":"
The broader S&P 500 fell 3.2%. That index is now more than 20% below its all-time high set in January, putting stocks in bear-market territory.<\/p>\n
After raising rates by a half point in May – an action the Fed hadn’t taken since 2000 – Chair Jerome Powell pledged more of the same until the central bank was satisfied that inflation was under control. At that point, the Fed would resume standard quarter-point hikes, he said.<\/p>\n
“After holding their breath for nearly a week awaiting the US CPI report for May, investors exhaled in exasperation as inflation came in hotter than expected,” Sam Stovall, chief investment strategist at CFRA, said in a note to clients Monday morning. <\/p>\n
Stovall said the risk of larger hikes is dragging the markets lower Monday.<\/p>\n
Investors fear two outcomes, neither of them good: Higher rates mean bigger borrowing costs for businesses, which can eat into their bottom lines. And overly zealous action from the Fed could unintentionally plunge the US economy into a recession, especially if businesses start laying off workers and the red-hot housing market crumbles. <\/p>\n
There’s no sign that the job and housing markets are in danger of collapse, although both are cooling off somewhat.<\/p>\n
“Economists are very bad at predicting recessions, but I think the Fed has a decent chance – a reasonable chance – of achieving what Powell calls a ‘soft-ish landing,’ either no recession or a very mild recession to bring inflation down,” Bernanke said.<\/p>\n<\/div>\n
.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Dow (HINDU) sank 750 points, or 2.4%, and the Nasdaq fell 3.7%. The broader S&P 500 fell 3.2%. That index is now more than 20% below its all-time high set in January, putting stocks in bear-market territory. Stocks briefly fell into a bear market on May 20, although a late-day rally rescued the market …<\/p>\n