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US stocks witness volatile trading on FOMC rate decision

The Federal Reserve hiked its target interest rate by three quarters of a percentage point, as expected. Chair Jerome Powell said that the Fed could start to dial back rate hikes in future meetings, giving the economy a bit of a breather from punishing interest rate spikes that have slowed hiring, if not inflation.

But stocks fell after Powell noted rates will rise higher than expected to combat surging prices, dimming Wall Street’s hopes that a slower pace of rate hikes could mean interest rates will soon peak.

Stocks rose shortly after the Federal Reserve rate hike announcement was released at 2 pm ET. Fed chair Jerome Powell continued to stress in his 2:30 press conference that the central bank will continue to be vigilant about inflation and that more big rate hikes could lie ahead.

Those comments appeared to throw cold water on the notion that the Fed may be about to decrease the pace of rate hikes as soon as December. Turns out that the Fed is still worried about surging consumer prices and will be watching all the upcoming reports on inflation like a hawk.

The Dow was down nearly 50 points, or 0.2%, in late afternoon trading.
The S&P 500 fell 0.8%.
The Nasdaq Composite was down 1.3%.

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