Friends
As expected, the Federal Reserve raised the Fed Funds rate another 50 basis points today bringing the rate to 4.25-4.5%. And as expected, both in the Fed statement itself and in the 45-minute press conference the Fed remains steadfast that they are taking rates into the 5’s regardless of what the markets believe. And as expected, stocks were all over the place. A several hundred-point Dow rally turned into a several hundred-point Dow deficit after the release of the statement at 1:00. The next two hours saw stocks whipsawed within that range back and forth.
By the close, the Dow Jones Industrial Average was down 142 points to finish the day at 33,965. The S&P 500 was down 24 points to close at 3,995. The Nasdaq Composite Index was down 85 points to close at 11,170. Gold was down $6 to trade at $1,818 per ounce, while oil was up $2.03 to trade at $77.42 per barrel WTI.
Recent months have seen market participants continuously trying to predict a Fed pivot away from their hawkish stance on inflation to a more moderate policy designed to limit possible recessionary headwinds. But the Fed continues to insist that they are not done raising rates and that they need to see a lot more evidence that inflation is abating than a couple of CPI numbers before they even consider taking the foot off the pedal. Thus, the continuous volatility in stocks and bonds. Perhaps volatility will cool down as we head towards the holidays. Or maybe not.
Have a nice evening everyone.
