What the Fed’s biggest rate hike in decades means for the bear market in bonds

Historically bad. That’s how the $53 trillion US fixed-income market has performed this year as the Federal Reserve works to curtail high inflation threatening to wreck the economy. To turbo charge the effort, the Fed on Wednesday fired off its biggest benchmark interest rate increase in nearly thirty years. But what does that mean for … Read more

Why stocks and bonds went into relief-rally mode after Fed’s jumbo rate hike

Financial Reserve markets suffered an absolute bloodbath in the days leading up to Wednesday’s Federal Reserve decision, with stocks plunging and bond yields soaring in the wake of surprisingly hot inflation data — a sign that investors feared a Volcker-esque reaction from Federal Chairman Jerome Powell and the rest of the Federal Open Market Committee. … Read more

In `fragile’ financial markets ahead of Fed’s decision, some traders and strategists see risk of instant recession

Financial markets are on precarious footing since last Friday’s surprise reading on accelerating US inflation for May — with Treasurys, stocks, credit and currencies all exhibiting friction or tension ahead of the Federal Reserve’s interest-rate decision on Wednesday. According to strategist Ben Emons and trader Tom di Galoma, the process of transmitting monetary policy through … Read more

Stagflation concerns mount: Americans are increasingly worried about red-hot inflation, jobs and their own deteriorating finances

Consumer inflation expectations are back at record highs, but people have no plans to slow their spending, according to a regional Federal Reserve bank survey released Monday. Households saw a 6.6% median inflation rate in the year ahead, setting a record high first set in March, according to the Federal Reserve Bank of New York’s … Read more

Stock Futures Slip Amid Retail Worries

US stock futures edged down after a profit warning from Target cast a pall over the retail sector and Australia’s central bank spooked investors with a bigger-than-expected interest-rate increase. Futures tied to the S&P 500 declined 0.9%, reversing direction after the broad-market index closed up 0.3% on Monday. Nasdaq-100 futures fell 1.3%, pointing to losses … Read more

Investors may be in for this rude surprise: History shows inflation can take years to return to normal even when Fed hikes above 10%

History can be a powerful tool, particularly in a high-inflation environment like this one in which no suitable economic model seems to apply. Inflation — running at 8.3% as of April, near a four-decade high — has stayed stubbornly persistent for a full year to the surprise of virtually everyone who tracks it. Now there’s … Read more

Exclusive: Fed’s Bostic says idea of ​​September pause is not tied to any looming market rescue

Atlanta Fed President Raphael Bostic, in an exclusive interview with MarketWatch, said his suggestion that the central bank take a September “pause” in its push to raise interest rates should not be constructed in any way as a “Fed put,” or belief that the central bank would come to the rescue of markets. In a … Read more

Fed’s quantitative tightening is about to arrive: What that might mean for markets

The Federal Reserve’s almost $9 trillion portfolio is about to be starting on Wednesday, in a process intended to supplement rate hikes and buttress the central bank’s fight against inflation. While the precise impact of “quantitative tightening” in financial markets is still up for debate, analysts at the Wells Fargo Investment Institute and Capital Economics … Read more

‘Not the decoupling we wanted,’ investor says as bitcoin slumps, stocks rise.

Crypto investors have long hoped for a “decoupling” between bitcoin and growth stocks, as the two assets often traded in tandem during the past several months. Both have suffered so far this year, as investors are concerned about soaring inflation, signs of a softening monetary economy and the Federal Reserve’s tightening of its monetary policy. … Read more

Dow books 4th day of gains, stocks rally after Fed minutes signal flexibility on interest rate hikes

Stocks closed higher Wednesday as investors took away a message of flexibility from the release of minutes of the early May Federal Reserve meeting about its path to higher interest rates. How did stocks trade? The Dow Jones Industrial Average DJIA rose 191.66 points, or 0.6%, ending at 32,120.28. The S&P 500 SPX gained 37.25 … Read more