The Dow dropped 3% and the Nasdaq composite ended 3.9% lower, reflecting a broad sell-off led by technology stocks. Higher rates help corral inflation, but they also hurt asset prices.
Powell acknowledged the increases will hurt U.S. households and businesses, in perhaps an unspoken nod to the potential for a recession. But he also said the pain would be far greater if inflation were allowed to fester and that “we must keep at it until the job is done.” The Dow lost 1,008.38 points to close at 32,283.40. The last time the blue-chip average had a 1,000-point drop was in May.The Russell 2000 index of smaller companies fell 64.81 points, or 3.3%, to finish at 1,899.83.
“Powell reiterated that the Fed is worried about rising prices, and getting inflation under control is emphatically job number one,” said Jeff Klingelhofer, co-head of investments at Thornburg Investment Management.Perhaps giving some hope to investors, some analysts said Powell seemed to indicate expectations for future inflation aren’t taking off. If that were to happen, it could cause a self-perpetuating cycle that worsens inflation.
A report Friday morning showed that the Fed’s preferred gauge of inflation decelerated last month and wasn’t as bad as many economists expected. It’s a potentially encouraging signal, which may embolden more of Wall Street to say that the worst of inflation has already passed or will soon.Other data showed that incomes for Americans rose less last month than expected, while consumer spending growth slowed.
Americans investments & retirement plans dissolve as this current administration sends billions to other places like Ukraine. Joe’s America last policy is hurting all of us while politicians get rich. We need to v o t e them all out & impose term limits.
But...but...but...inflation was 'zero' in July! 🤡🤡🤡
Imagine that, I'm glad that we'll be paying for deadbeats tuitions.
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Dow drops 1,000 after Fed's Powell says rates will stay highStocks closed sharply lower after the head of the Federal Reserve dashed Wall Street’s hopes that it may soon ease up on high interest rates in its effort to tame inflation
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