Asian markets have skidded lower after Wall Street fell the most since June 2020 as a report showed inflation has kept a surprisingly strong grip on the U.S. economy
Traders work on the floor of the New York Stock Exchange on Tuesday, Sept. 13, 2022. The stock market fell the most since June 2020, with the Dow loosing more than 1,250 points. Asian markets skidded lower on Wednesday after Wall Street fell the most since June 2020 as a report showed inflation has kept a surprisingly strong grip on the U.S. economy.
On Tuesday, the Dow lost more than 1,250 points and the S&P 500 sank 4.3%. Tuesday's hotter-than-expected report on inflation has traders bracing for the Federal Reserve to raise interest rates still more, adding to risks for the economy. The hotter-than-expected reading has traders bracing for the Federal Reserve to ultimately raise interest rates more than expected to“Right now, it’s not the journey that’s a worry so much as the destination,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments. “If the Fed wants to hike and hold, the big question is at what level.
Such a slowdown might let the Fed reduce the size of its rate hikes through the end of this year and then potentially hold steady through early 2023. Traders now see a one-in-three chance the Fed will hike the benchmark rate by a full percentage point next week, quadruple the usual move. No one in the futures market was predicting such a hike a day earlier.
Tuesday's data casts doubt on hopes for such a “soft landing.” Higher rates also hurt prices for stocks, bonds and other investments.
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