Economics
Wall Street Sees ‘Devil’s Bargain’ in Powell’s Rate Comments
- Stocks sink on Fed chair saying ‘we have some ways to go’
- ‘Market has been misinterpreting’ what a pivot is: Mulberry
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Wall Street had already come to terms with prospects that the Fed would again raise interest rates by 75 basis points. But Wednesday afternoon was full of drama as traders first took hope from the central bank’s statement but then slumped following stern comments by Chair Jerome Powell.
Stocks initially jumped and Treasury yields sank on lines in the statement that said that future tightening would be mindful of “the lags with which monetary policy affects economic activity and inflation,” suggesting the central bank would watch for how over-tightening could risk sending the economy into deep recession.