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
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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