Wall Street’s main indexes slipped on Tuesday as a stronger-than-expected reading on the U.S. services sector fueled expectations that the Federal Reserve will keep raising interest rates in an effort to reign in rampant inflation running at 40-year highs.
Rate-sensitive shares of Apple , Amazon.com Inc, and Microsoft Corp fell about a percent each as benchmark U.S. Treasury yields rose to their highest levels since June.
“The primary concern by far, for almost everyone, is really just what’s going to happen with the Fed and interest rates,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
“While the Fed’s definitely going to keep hiking its interest rates, I think there’s zero question about that. The only question is how much and how fast.”
Traders see about 75% chance of a third 75-basis-point rate hike at the Fed’s policy meeting later this month.
The benchmark S&P 500 closed at a six-week low on Friday as worries about the European gas crisis overshadowed relief from the monthly jobs data, which pointed to a slight easing of wage pressures. The index is down nearly 18% so far this year, while the Nasdaq has shed nearly 26% as rising interest rates hurt megacap technology and growth stocks.
MacDailyNews Take: The Fed’s current target interest rate range is 2.25% to 2.50%.
In January, Interactive Brokers founder Thomas Peterffy said, “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
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What a clusterfuck all these governments have created. All these individual pieces contribute to a massive hardships and painful years ahead. Governments apparently have neither the will or understanding to run a country competently.
Democrats destroy every single thing they touch. Without exception.
I don’t know, they’ve managed to drive the GNP of the welfare state to record heights, and without actually helping anyone! Quite the accomplishment. 🙂
That honor is reserved for gun-toting gaslit insurrectionist & democracy-busting Republicans. Without exception indeed.
Per the “welfare state”: The Great Society has proven to not have any greatness at all.
“Show me the incentive and I’ll show you the outcome.” C Munger
Where are all the liburd posts defending the economy and dementia Joe????????
Printing your ballot!