Stocks Slump as Fed Keeps Rates Unchanged and Raises Economic Projections
Stocks slumped after the U.S. Federal Reserve made the widely expected decision to maintain key interest rates. Additionally, the Fed revised its economic projections higher, all while warning that the battle against inflation was far from over. The aftermath of this announcement, along with the accompanying Summary Economic Projections (SEP) and dot plot, saw all three major U.S. stock indexes experiencing significant fluctuations.
The dot plot indicates an anticipated additional 25 basis point rate hike this year, reaching a peak in the 5.50%-5.75% range. Furthermore, the projections call for 50 basis points of rate cuts next year. Peter Cardillo, chief market economist at Spartan Capital Securities in New York, commented, "There were no surprises. The Fed sees one more rate hike and envisions interest rates remaining elevated a bit longer than previously stated, and that's cutting into the market."
According to the updated projections, the Fed funds target rate is expected to edge down to 5.1% by the end of next year and to 3.9% by the end of 2025. In terms of market performance, the Dow Jones Industrial Average rose 0.39% to 34,651.28, the S&P 500 lost 0.94% to 4,402.20, and the Nasdaq Composite dropped 0.27% to 13,641.80
So 4400 was a good FOMC target. Now that we're away from that nonsense, we can start concentrating on the bigger picture correction with the flows diminishing. My next targets are 4309, 4212 and if we get a US government shutdown, 4053.
Stocks slumped after the U.S. Federal Reserve made the widely expected decision to maintain key interest rates. Additionally, the Fed revised its economic projections higher, all while warning that the battle against inflation was far from over. The aftermath of this announcement, along with the accompanying Summary Economic Projections (SEP) and dot plot, saw all three major U.S. stock indexes experiencing significant fluctuations.
The dot plot indicates an anticipated additional 25 basis point rate hike this year, reaching a peak in the 5.50%-5.75% range. Furthermore, the projections call for 50 basis points of rate cuts next year. Peter Cardillo, chief market economist at Spartan Capital Securities in New York, commented, "There were no surprises. The Fed sees one more rate hike and envisions interest rates remaining elevated a bit longer than previously stated, and that's cutting into the market."
According to the updated projections, the Fed funds target rate is expected to edge down to 5.1% by the end of next year and to 3.9% by the end of 2025. In terms of market performance, the Dow Jones Industrial Average rose 0.39% to 34,651.28, the S&P 500 lost 0.94% to 4,402.20, and the Nasdaq Composite dropped 0.27% to 13,641.80
So 4400 was a good FOMC target. Now that we're away from that nonsense, we can start concentrating on the bigger picture correction with the flows diminishing. My next targets are 4309, 4212 and if we get a US government shutdown, 4053.
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