Stocks sold off sharply Friday after Federal Reserve Chair Jerome Powell said in his Jackson Hole speech the central bank won’t be turning dovish in its fight against rampant U.S. inflation running at Carteresque 40-year highs.
The Dow Jones Industrial Average dropped 611 points, or 1.85%, after initially seesawing during the Fed chair’s comments. The S&P 500 fell 2.18% and the Nasdaq Composite slid 2.71%.
Those moves follow a hawkish speech from the Fed chair who reiterated a tough stance against inflation, spurring investors to weigh the implications of higher interest rates for longer.
“Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy,” Powell said.
The major averages were on pace for their second straight down week. The Dow is on track for a 2.9% decline. The S&P 500 and Nasdaq Composite are heading to losses of roughly 2.8% and 3.2%, respectively.
Tech giants in the group helmed the decline, with shares of Alphabet sliding nearly 4%. Meta lost 2.5% and Netflix fell 2%. Twitter lost 1.5%. [Apple shed 2.08%.]
Tech names are especially sensitive to rising interest rates, which hurt the value of the stocks’ future earnings.
MacDailyNews Take: In January, Interactive Brokers founder Thomas Peterffy said, “Inflation is 7% — 1% or 2% [in interest rate hikes] doesn’t mean anything. If they really wanted to stop inflation, they would have to raise rates to 4%, 5%, 6%.”
‘Tis best to get a handle on inflation, if you know how, while you still can. – MacDailyNews, May 11, 2021
Stop the misguided crusade against domestic energy production and profligate federal spending and inflation will be stopped dead in its tracks. It’s not difficult. – MacDailyNews, May 11, 2022
For new generations, sometimes tough lessons have to be retaught and learned the hard way. As we go through this, remember: It’s always darkest before the dawn. – MacDailyNews, July 14, 2022
Inflation is repudiation. — Calvin Coolidge
When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill… [which] comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan
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What? Rampant inflation? I didn’t know about that. Joe has everything under control. Doing a bang up job!
This inflation spiral is all about the pseudo-religion of global warming (climate change) and the misguided pseudo-religious war on energy sources that actually are affordable and work.
Leftists, Democrats, and Establishment Globalists have turned their backs on religion, but the human soul knows there is a greater force and hence searches for God, so they have substituted “Climate Change” for “God.”
“Climate Change” is the false god of Leftists, Democrats, and Establishment Globalists.
This is why they hated Trump so much.
Not for the “mean tweets,” but for canceling the stupid, do-nothing, holy scripture Paris Agreement immediately upon assuming office. It was among the very first travesties into which their installed puppet Biden re-entered – illegally, of course (treaties like this actually require congressional approval in America).
With “Climate Change” as their “God,” and after years of demonizing a businessman who brought America to the lowest unemployment ever measured, it’s clear why they embraced “By Any Means Necessary” and rigged the 2020 election using COVID as a cover to install a controllable puppet using Zuckerberg-funded drop boxes that lacked a verifiable chain of custody into inner-city Democrat districts to get “votes” into the system that no audit or court could remove after the fact.
Leftists, Democrats, and Establishment Globalists believe they have “God” (overwrought, continually wrong, climate change fairy tales of doom) on their side, so they feel they can do anything: Bogus impeachments, rigging elections, wide-open borders, war on energy creating four-decade-high inflation, weaponizing the FBI against a president over nothing, etc.
I fear for Trump’s life. I hope he has more than adequate, uncorrupted protection. The leftist zealots will clearly stop at nothing in the name of their false god.
The Democrats have infiltrated and corrupted the FBI.
Whether media-driven people realize it or not, First Then just laid out the facts. It’s hard for some who have been inundated with the repetitious agitprop of the past few decades to peer through the fog of cultural and money war that is being waged by government grifters and salivating socialists to wrest control of the levers of power of this great country. I’ve watched it happen since the early 1970s and it is no joke.
Ask the elderly Cubans and Venezuelans about how the professorial intellectuals flirted with socialism/communism as if it was the hip and trendy thing back in 1960 and late 1990s. Their descendants have suffered horrific predation and deprivation ever since the gun-wielding “leaders’ took over. And China has endured the same fate since 1949; with the only legitimate Chinese elected government being Taiwan up to the present day. Think about how Germany in the 1930s fell prey to the fast talking National Socialists resulting in many millions of deaths both before and during WW2.
Those of us who have the long-term historical perspectives of seniors can see clearly what threats are at the door today. First Then has written a prophetic warning. Ignore it at your own peril; in a few years it will haunt you if you fail to see it yet do nothing.
100% Correct.
We hate Trump because he’s the most unconstitutional minded chief executive* to ever occupy the office. Even Robert E. Lee wasn’t as big a traitor.
Psssttt… still never git a majority… even Hillary laughs at him.
A new definition of Inflation is in the works from Biden’s talking heads.
Thanks, Libturds. You are too fucking stupid to know the damage you have done.
Isn’t it interesting how the mdn dog whistle always brings out the same yapping mutts?
Fed chairman Powell guides monetary policy, not Biden. The Fed is independent of political control. What POTUS appointed Powell? Some people are so desperate to attack the sitting president that they conveniently forget reality.
If you’re this upset about your investments following the predictable and measured remarks of Powell, you should get out of the market. Had you been an investor during the Volcker years, you would be jumping out your high rise window. Of course now you look on that period of higher inflation with a strange reminiscence characteristic of a person who didn’t live it, and instead spends all his energy parroting political extremism.
🤣 You’ve “heard it all before” but twisted the story. The FED is an illegitimate and unconstitutional manipulator of the world’s economies. Banksters were thrown out by Andrew Jackson and for good reason. A truly free market economy has inherant self-correcting features for both the currency and sustainable growth. Read the works of Hayek (The Road to Serfdom” and other Austrian economist to see how things are supposed to function, and did function until the 1913 implementation of the IRS and the FED. Prior to that: some recessions that fixed themselves; a dollar that now has been destroyed such that it takes $100 to buy what it did then; taxes on our labors that never existed in the USA until the foot-in-the-door tax “only on passive income of the rich, and then only 1%” and now strip us of our life’s blood at all levels and have enabled needless wars all over the globe since then. Study it and weep.
Sorry, you have it wrong.
Congress has legally chartered national banks ever since Hamilton founded the first. The 1913 creation of the modern independent Federal Reserve has dramatically improved US monetary management, and both political parties have seen the advantage of keeping that system in place. The extremists who claim falsely that the Fed is unconstitutional have had 230 years to come up with a case, and as usual, they can’t do it. They instead flood the internet with their illogical gripes.
Correct, Jackson vetoed the charter renewal of the Second National Bank of the US. What you failed to state is that this move directly contributed unregulated banks pumping up their unscrupulous lending and unchecked monetary expansion, resulting in the Panic of 1837, which was a deep 4-year depression. Half of all banks failed. Deflation took hold, and wages didn’t recover until 1844. In many parts of the US, the economy didn’t actually recover until the 1849 gold rush, in which many immigrants poured into the US seeking fortune, and of course increasing consumer spending. Tell the whole truth if you want to be taken seriously.
Stable currency is what helped the US harmonize its interstate trade a century ago, unite to become an industrial superpower, and now enjoy the fruits of having the defacto international reserve currency and most popular international trade currency. If you read any history, you’d see that 19th century economic swings DID NOT fix themselves, it state and federal governments undertook huge intervention to try to manage the economy. Of course a scattering of ~7500 banks, some honest and most not, worked at cross purposes most of the time. Herding the cats was impossible without a national banking system. The many recessions in US history and their causes have been well investigated and documented. This is precisely why an apolitical Fed has existed since 1913. As for the IRS, well, blame Washington and every president since for providing citizens the services they demand. The common good you take for granted doesn’t magically occur for free. We can all agree that improved efficiency would be nice, but the nonstop deficit spending from both political parties is not the blame of the Fed or the IRS. Ultimately, it’s the people (or, since Citizens United, the anonymous multinational corporation) who petitions the government for more stuff every year. How about you redirecting your angst towards the corrupt lobbyists and puppetmasters that control both political parties?
If you want to destroy the Fed, you’d have to immediately replace it with a new national bank independent of Washington politics, otherwise you can kiss international investors goodbye, and be prepared for much greater swings of inflation.
Please read more history and less modern politically charged sources to gain understanding of the Fed, its legal basis, and how modern monetary policy is managed, and WHY it has evolved to become the way it is. If you think more politics is the answer (seems par for the course to some regular posters on this site), you are grossly mistaken. The independent US Fed is one institution that makes the US greater than other nations.
Dear Steve: ” unchecked monetary expansion” — LMFO; if you think it was bad back in the 1840s then WTH do you think we’ve had for 110 years since the establishment of the FED??
The illicit vote by a portion of the Congress (all they needed was a “quorum”) over a Christmas week holiday on a vacation island to create the FED is a joke and was created by the Soros of that era: J.D. Rockefeller. Congress abdicated its prior and proper management of our currency and money, enabling the gradual destruction of the $ which previously had a requirement of gold backing which limited how much the govt could spend.
Your well written treatise has some slick numbers and seeming truths but the evidence backs me up: our treasury, working hand-in-glove with the FED banksters destroyed 99% of the dollar’s purchasing power over the 100 years since we were saddled with the FED. The 4 year recession you cite was a joke in contrast with what the FED caused: first the Roaring 20s when they hit the accelerator without understanding the multiplier effect of new money; then the “brakes application” which resulted in the Great Depression for the same lack of understanding. It took 13-15 years of starvation & misery until the Depression waned as a result of the second World War job creation and war bonds financing of it. FDR exacerbated the Depression by wasteful temporary government projects spending which sucked capital from potentially permanent jobs creation that entrepreneurs and companies would have provided.
Again, you wrote a nice professorial piece, but the evidence is in my favor. Capitalism does need some management ala the Standard Oil and AT&T breakups but is solidly based on fulfilling the needs and desires of humankind/customers in a voluntary exchange; and “government is not the answer, government IS THE PROBLEM.”
Wow. Steve88 stated facts and your trotting out BS conspiracy theories.
Post-WW1, the US transitioned from being a debtor nation to a creditor as European nations rebuilt. They sought US credit specifically because the US Fed could better ensure stable monetary value than any other nation.
Nixon was the one who eliminated the gold standard in the US … In 1971.
Somebody has a problem with politics, it’s you.
Yup. The fed has no political bias, just like the FBI.
It’s not bias moron, it’s sense of justice.
It is National Dog Day after all…
But dogs smell better than deplorables.
Speaking of dead dogs, Truth Social is going down the crapper with no income, can’t pay Right
ForgeFlop for hosting – $1.6m debt and counting – and has only $3000 in the bank.And we’re supposed to take economic lessons from the boneheads here?