Dow drops more than 300 points after Fed sees inflation jump, rates increasing in 2023
June 16, 2021 @ 22:15 +03:00
U.S. stocks dropped to their session lows on Wednesday after the Federal Reserve raised its inflation expectations and moved up the time frame on when it will hike interest rates next. The Dow Jones Industrial Average turned sharply lower and last traded 320 points lower. The S&P 500 fell 0.9% after hitting an all-time high in the previous session. The tech-heavy Nasdaq Composite erased earlier gains and traded 1% lower as Alphabet, Facebook, Netflix and Microsoft all dropped at least 1%.
All 11 S&P 500 sectors fell into the red, led to the downside by tech, materials and consumer staples. The policymaking Federal Open Market Committee indicated that rate hikes could come as soon as 2023, after signaling in March that it saw no increases until at least 2024.
Major equity benchmark traded slightly off their lows of the day after Chairman Jerome Powell said in a press conference that the so-called dot-plot projections should be taken with a “big grain of salt” and that the liftoff is “well into the future.” The central bank gave no indication as to when it will begin cutting back on its aggressive bond-buying program. The Fed has been buying $120 billion worth of bonds each month as the economy continues to recover from the coronavirus pandemic. The Fed chief said that the central bank with provide “advanced notice” before announcing their move to taper asset purchases.
Dow drops more than 300 points after Fed sees inflation jump, rates increasing in 2023, CNBC, Jun 17