{"id":528547,"date":"2022-12-17T14:00:00","date_gmt":"2022-12-17T11:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/fed-wall-street-in-a-brawl-over-inflation-cure\/"},"modified":"2022-12-17T14:00:00","modified_gmt":"2022-12-17T11:00:00","slug":"fed-wall-street-in-a-brawl-over-inflation-cure","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/fed-wall-street-in-a-brawl-over-inflation-cure\/","title":{"rendered":"#Fed, Wall Street \u2018in a brawl\u2019 over inflation cure"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a29cb2d9cd7d\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a29cb2d9cd7d\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/fed-wall-street-in-a-brawl-over-inflation-cure\/#Fed_Wall_Street_%E2%80%98in_a_brawl_over_inflation_cure\" >Fed, Wall Street \u2018in a brawl\u2019 over inflation cure<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"Fed_Wall_Street_%E2%80%98in_a_brawl_over_inflation_cure\"><\/span>Fed, Wall Street \u2018in a brawl\u2019 over inflation cure<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2022\/09\/PowellJay_092122_AP-Jacquelyn-Martin.jpg?w=900\" \/><\/p>\n<div>\n<p>The Federal Reserve and the stock market are butting heads over the central bank\u2019s efforts to fight inflation.<\/p>\n<p>Stocks c<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ed a steep two-day sell-off on Friday, wiping out gains from a rally earlier in the week driven by hopeful economic <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>. Inflation as measured by the consumer price index had fallen for the fifth straight month \u2014 and far more than analysts expected \u2014 according to data released right before the Fed was set to slow down its interest rate hikes.<\/p>\n<aside class=\"ad-unit ad-unit--mr1_ab\"><\/aside>\n<p>While the Fed did end up boosting rates by a smaller amount than its previous four hikes, a dour forecast from officials, including Chairman Jerome Powell, shook markets out of their optimism. Instead of signs of lower interest rates ahead, the Fed warned rates would be even higher and stay that way for longer.<\/p>\n<p>The Dow Jones Industrial Average closed down 281 points Friday, falling 0.9 percent on the day for its second straight week of losses. The S&amp;P 500 index closed 1.1 percent lower, and the Nasdaq closed with a loss of 1 percent on the day, respectively.\u00a0<\/p>\n<p>\u201cThe Fed and the stock market are fighting. They\u2019re in a brawl right now,\u201d said Callie Cox, U.S. investment analyst at online investment firm eToro, in a Friday phone interview.<\/p>\n<p>\u201cThe stock market\u2019s been itching for a pivot for months now, really since the summer, and the Fed time and time again has told us that they\u2019re serious about inflation, they want to get inflation under control, and if that means keeping rates high for a while, so be it,\u201d she added.<\/p>\n<p>As interest rates continue to rise, businesses will face steeper borrowing costs and have less money to invest in expansion, making their stocks less appealing to investors. Households will also have less expendable income to throw in the market as interest rates on their mortgages, car payments and credit cards rise.<\/p>\n<p>The stock market\u2019s hardship, however, is an important part of the Fed\u2019s plan.<\/p>\n<aside class=\"ad-unit ad-unit--mr2_ab\"><\/aside>\n<p>Fed officials know their tough talk about keeping rates high and snuffing out inflation at whatever the cost alarms investors and traders. Those warnings are intended to keep Americans\u2019 expectations in check and force businesses to feel the squeeze of high rates without rising stock prices to buffet the blow.<\/p>\n<p>\u201cThe Fed knows that its words are equally as powerful in a world where <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social media<\/a> is so pervasive and information just moves so quickly,\u201d Cox said. \u201cThe Fed is preparing markets for what\u2019s coming before it actually happens. This time around, though, it just feels a little bit more painful because the Fed needs to get inflation down.\u201d<\/p>\n<p>Powell said during a Wednesday press conference that the U.S. still had \u201ca long ways to go\u201d before inflation was down to a sustainable level. He added that the only way for the Fed to achieve that goal was to keep its foot on the brakes of the economy with high interest rates meant to boost the unemployment rate.<\/p>\n<aside class=\"ad-unit ad-unit--mr3_ab\"><\/aside>\n<p>The November jobless rate of 3.7 percent is just 0.2 percentage point below its level in February 2020, then a five-decade record low. But the U.S. workforce has roughly 4 million fewer workers now than it did before the onset of the pandemic, while businesses are posting record numbers of open jobs.<\/p>\n<p>With fewer workers available to fill open jobs, businesses have been forced to boost wages to attract candidates \u2014 and prices to compensate for that higher pay. That dynamic, Fed officials say, is the reason why inflation has remained high even as prices for almost all goods other than food have fallen.<\/p>\n<p>\u201cWe have too many jobs and too few workers, so that means that wage inflation is going to be far from a sustainable average, and we\u2019re going to have that passing through to prices. That\u2019s what we\u2019re working on right now,\u201d said Mary Daly, president of the Federal Reserve of San Francisco, at <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.frbsf.org\/our-district\/events\/mary-c-daly-at-the-american-enterprise-institute-2022\/\">a\u00a0Friday event\u00a0hosted by the American Enterprise Institute<\/a>.<\/p>\n<aside class=\"ad-unit ad-unit--mr4_ab\"><\/aside>\n<p>\u201cTo be honest with you, I don\u2019t quite know why markets are so optimistic about inflation,\u201d Daly said.<\/p>\n<p>On Wednesday, Fed officials boosted their projections for how high they would need to raise interest rates and how long they would keep them at levels meant to hinder the labor market.<\/p>\n<p>They now expect to hike interest rates to a span of 5 to 5.25 percent by the end of 2023, up from the 4.5 to 4.75 range officials projected in September, and they don\u2019t foresee cutting rates until 2024.<\/p>\n<p>The Fed also sees its rate hikes taking a serious toll on the U.S. economy, projecting the jobless rate to increase by 0.9 percentage points to 4.6 percent by the end of 2023 and economic growth slowing to 0.5 percent. While Fed officials say it may be possible to avoid heavy job losses in that scenario, most outside economists believe such an increase in the jobless rate would mean more than 1 million Americans losing work.<\/p>\n<p>\u201cThe Fed did not welcome the disinflation trends that have just started to emerge and focused on robust job gains and elevated inflation. Any hopes of a soft landing disappeared as the Fed seems like they are committed to taking rates much higher,\u201d said Edward Moya, senior markets analyst at OANDA, in a Wednesday note to clients.<\/p>\n<p>A Fed-driven recession or steep slowdown would be more bad news for the stock market as companies struggle with lower sales and fewer households have the flexibility to put money in risky assets. But higher rates in and of themselves could be a larger and longer-term damper on the stock market.<\/p>\n<p>Stocks exploded in value in the years following the Great Recession as the Fed kept its baseline interest rate range near zero. The market\u2019s stunning rally accelerated even more during the COVID-19 pandemic, when low interest rates and trillions of dollars in federal stimulus helped fuel new records across all three major indexes.<\/p>\n<p>With rates likely to stay high for much longer, Cox said the days of the market smashing through record highs again are likely far away.<\/p>\n<p>\u201cWhen we look at 2023, we kind of see a year of purgatory,\u201d she said.<\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thehill.com\/policy\/finance\/3778611-fed-wall-street-in-a-brawl-over-inflation-cure\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Fed, Wall Street \u2018in a brawl\u2019 over inflation cure The Federal Reserve and the stock market are butting heads over the central bank\u2019s efforts to fight inflation. Stocks capped a steep two-day sell-off on Friday, wiping out gains from a rally earlier in the week driven by hopeful economic news. Inflation as measured by the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":528548,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2022\/09\/PowellJay_092122_AP-Jacquelyn-Martin.jpg?w=1280","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[134344,134343,134353,70610,90482,78738,134540,4965],"class_list":["post-528547","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-administration","tag-campaign","tag-court-battles","tag-finance","tag-house","tag-jerome-powell","tag-overnight-defense","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/528547","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=528547"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/528547\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/528548"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=528547"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=528547"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=528547"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}