STOCK MARKET WATCH -- Thursday, 15 December 2022

[progree]

1. Wall Street didn't like the Fed announcement

The S&P 500 closed yesterday at 4020 and rose to 4058 before the announcement. It dived right after the announement and wobbled to a close of 3995. Its down 16.7% from its Jan 3 all time high, and down 16.2% year-to-date.

Wall Street liked the relatively modest 0.50 percentage point rise in the Fed Funds rate, a smaller amount than the 0.75 percentage point increases the last 4 times. That was widely expected after yesterday's lower-than-expected CPI report (CPI in November up just 0.1%, Core CPI in November up 0.2%). But they didn't like the hawkish tone of Powell's remarks and especially the higher projected terminal rate for the Fed Funds rate --

From Yahoo Finance:

Stock market news live updates: Stocks sink after Fed hikes, Powell gives hawkish outlook, Yahoo Finance, 12/14/22

The central bank lifted its key policy rate by half a percentage point, slowing the pace from hikes of 75 basis points across the prior four meetings. The move brings the federal funds rate to a new range of 4.25% to 4.5%, the highest level since December 2007.

Fresh economic forecasts from the Fed that accompanied the decision show officials now see benchmark interest rates peaking at 5.1% in 2023, 50 basis points higher than the previously projected 4.6% in September. Officials then see rates coming down to 4.1% in 2024, slightly higher than previously projected.

MORE: https://finance.yahoo.com/news/stock-market-news-live-updates-december-14-2022-111241774.html

My latest CPI megapost: https://www.democraticunderground.com/10143007428#post2