US stocks fell on Wednesday after higher-than-expected inflation data fueled fears that the Federal Reserve may take a more aggressive stance on raising interest rateswhich could lead to an economy Recession.
The Standard & Poor’s 500 It fell 0.5% after falling as much as 1.6% previously. The Nasdaq It gave up 0.2% and almost erased its initial 2.1% loss. Stocks have fallen multiple times throughout the day, as is usual on Wall Street in this turbulent year. Industry average Dow Jones It fell 0.69 percent.
They followed an example Treasury returns In the bond market, which initially rallied amid expectations that the Federal Reserve will raise interest rates sharply to curb high inflation in the country.
US consumer prices accelerated in June Because costs gasoline and the foods The data showed it remained elevated, leading to the largest annual rise in inflation in 40-and-a-half years and underpinning the case for the Federal Reserve raising interest rates.
When you look at the data, a lot of it has to do with energy prices. So if you go back, inflation is starting to slow down in other areas, which is what the Fed wants to see.” Dennis Dickthe owner-operating company of Bright Trading LLC in Las Vegas. “I think (markets) are saying this June data was the peak of inflation and it’s only going to get better from here.”
“For four or five months now, we’ve had a sharp rise in inflation which has consistently disappointed us”said John Lynch, chief investment officer at Comerica Wealth Management.
“The shock and awe that the Fed is experiencing can do significant collateral damage to the economy without providing really short-term inflation relief,” he said. Brian JacobsonSenior Investment Analyst at Allspring Global Investments. “Maybe the Fed needs to temper people’s expectations of what it can do”He said.
push up global prices central banks to increase borrowing costs this year, raising concerns that reversing decades of easy money policies could lead to a severe economic downturn.
Fed policy rate futures traders quickly quote with probability of more than fifty% from increase 100 points Fundamentals at the next meeting, according to CME Group’s Fedwatch tool, up from a 7.6% chance the day before. Expectations for a rate hike were lowered by 75 basis points to 46.5%.
(With information from The Associated Press and Reuters)