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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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Ben Paul

Ben Paul

Published Mon, Sep 26, 2022 · 05:50 AM
    • FOMC participants are now projecting US gross domestic product growth of just 0.2 per cent for 2022, and 1.2 per cent for 2023.
    • FOMC participants are now projecting US gross domestic product growth of just 0.2 per cent for 2022, and 1.2 per cent for 2023. PHOTO: BT FILE

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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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    BT CorrespondentsUS Federal ReserveInflationGlobal equitiesSingapore equities

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