The center of Wall Street’s focus was again on the Federal Reserve, which is scrambling to get inflation under control. Its main method is to raise interest rates in order to slow the economy, a blunt tool that risks a recession if used too aggressively.
No one thinks the Fed will stop there, with markets bracing for a continued series of bigger-than-usual hikes. Those would come on top of some already discouraging signals about the economy and corporate profits, including a record-low preliminary reading on consumer sentiment that was soured by high gasoline prices.
The 10-year yield jumped to 3.32% from 3.15%, and the higher level will make mortgages and many other kinds of loans for households and for businesses more expensive. It has more than doubled this year. In Asia, indexes fell at least 3% in Seoul, Tokyo and Hong Kong. Stocks there were also hurt by worries about COVID-19 infections in China, which could push authorities to resume tough, business-slowing restrictions.Some of the biggest hits came for cryptocurrencies, which soared early in the pandemic when record-low interest rates encouraged some investors to pile into the riskiest investments. Bitcoin tumbled more than 14% from a day earlier and dropped below $23,973, according to Coindesk.
The last bear market wasn’t that long ago, in 2020, but it was an unusually short one that lasted only about a month. The S&P 500 got close to a bear market last month, briefly dipping more than 20% below its record, but it didn’t finish a day below that threshold. That would mark another roughly 10% drop from the current level, and Wilson said it reflects his view that Wall Street’s earnings forecasts are still too optimistic, among other things.
Business Business Latest News, Business Business Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: globeandmail - 🏆 5. / 92 Read more »