After latest rate hike, Federal Reserve looks set to drive US economy into recession

The US Federal Reserve was supposed to pivot at the end of its meeting on Wednesday (Nov 2), but it was the stock market that did so instead.

The markets initially rallied after the Fed’s statement seemed to open the exit door to its rate-hike cycle. But the rally soon petered out, and the biggest “Fed day” selloff in more than a year ensued after Fed chairman Jerome Powell slammed the door on any policy pivot.

The central bank raised interest rates by 75 basis points to bring its benchmark overnight rate to a range of 3.75 per cent to 4 per cent. It was the sixth rate increase of 2022 and the fourth of that ponderous size.