US stocks fall after US Federal Reserve sees 2022 rate hikes


Tokyo – U.S. Federal Reserve officials say the country’s central bank must raise interest rates earlier than the Federal Reserve’s latest estimate of possible rate hikes in 2023, starting next year. Friday’s share price fell sharply after saying it could be.

The S&P 500 Index fell 0.9% at 11:51 a.m. EST. All sectors of the benchmark fell, with the largest drop coming from banks and tech companies. The Dow Jones Industrial Average fell 388 points (1.1%) to 33,438, and the Nasdaq Composite Index fell 0.7%.

The S&P 500 is moving at a 1.5% pace down the week, while the Dow Jones is down more than 3%. The Nasdaq was slightly negative this week.

Federal Reserve Bank of St. Louis Governor James Bullard told business news channel CNBC that he expects the Fed to hike interest rates first in 2022. Estimate consensus rate hikes in 2023.

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The rapid economic recovery after the pandemic has caused some inflation, not only in the prices of basic materials such as wood, copper and oil, but also the prices of other basic products such as airline tickets and used cars. The general consensus is that inflation is temporary and the result of the economy recovering from levels close to recession, but part of the Fed’s mission is to control prices.

Ken Johnson, an investment strategy analyst at the Wells Fargo Investment Institute, said: “Investors are nervous about this.”

The first step the Federal Reserve could take is a $ 120 billion slowdown in monthly bond purchases that will help keep mortgages cheap, the Federal Reserve chairman said. He said the cone is still likely to be a “road”.

Higher interest rates make high-value stocks like tech companies less attractive to investors, pushing more investors into securities like bonds and earning better returns. This is done at the expense of the stock market.

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The Federal Reserve is also closely monitoring the labor market. The labor market is improving, but still lags behind other economies during the recovery.

“This gives investors peace of mind that the Fed will not raise rates if the economy does not return to its original state from a labor market perspective,” Johnson said.

2-year government bond yields, which closely track expectations of future Fed moves, fell from 0.23% the previous day to 0.27%. Yields on 10-year Treasuries fell from 1.51% Thursday night to 1.46%.

Some stocks have resisted a wider decline after reporting promising news. Software maker Adobe rose 1.9% after announcing strong earnings guidance and strong second-quarter earnings to investors. Firearms maker Smith & Wesson jumped 15.5% after increasing its quarterly dividend and posting strong performance in the fourth quarter.

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US stocks fall after US Federal Reserve sees 2022 rate hikes

US stocks fall after US Federal Reserve sees 2022 rate hikes


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