The New York Stock Exchange, which was approaching close to consensus shortly after the Fed’s decision to raise rates by half a point, to 0.75%-1.00%, and reduce its costs, is focused on listening to Jerome’s press conference. Powell, president of the central bank of America.
Around 9:00 pm, the Dow Jones rose 1.72% to 33,697, while the broader S&P 500 gained 1.7% to 4,246 pts, and the Nasdaq Composite, heavy in technology and science stocks, rose 1.62% to 12,766 pts.
When asked about the possibility of increasing the interest rate by 75 points at the next meeting in June, Powell said that it was not something that the Fed was considering seriously, which convinced the markets that it was growing fast.
On the stock market, yields began to fall again after this announcement. The 10-year T-Bond yield fell 4 basis points to 2.91% after peaking at 2.98% earlier in the session and reached 3% on Monday in the session, its highest level since December 2018. The 2-year T-Bond rate fell 15 bp Wednesday evening, back to 2.61%.
Before the announcement of the Fed, futures markets were expecting a three-quarter hike (75 basis points) in June, followed by two hikes in July and September, which would bring “fed money” at 2.50-2.75% At the beginning of the school year, before the end of the year around 3%, according to CME Group’s FedWatch tool, which tracks futures. The markets are much higher than the Fed’s, whose latest economic projections in March are expected to be around 1.9% at the end of 2022, and 2.8% at the end of 2023…
