Fed won’t let up until investors get a lot more nervous
Monetary policy decisions translate to slower economic growth through their effect on financial market conditions
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WHEN the US Federal Open Market Committee (FOMC) statement was released on Wednesday (Sep 21), there was a brief spike in the benchmark S&P 500 index.
A week earlier, unexpectedly strong US inflation data had some market watchers fearing the US federal funds rate might be raised by 100 basis points. Instead, the FOMC opted for a 75-basis-point hike – for the third time in a row.
The respite didn’t last long, though. The S&P 500 ended Sep 21 in the red, and tumbled even lower over the rest of the week.
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