New stock-market lows ahead? What investors need to know as Fed signals rates will be higher for longer.

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Federal Reserve Chair Jerome Powell signals rates will move higher and stay there longer. Investors wonder if that means new lows ahead for the stock market.

Federal Reserve Chairman Jerome Powell sent a clear signal interest rates will move higher and stay there longer than previously anticipated. Investors wonder if that means new lows for the beaten-down stock market lie ahead.

The market is now pricing in an over 66% chance of just a half percentage point rate increase at the Fed’s December 14 meeting, according to the CME FedWatch Tool. That would leave the fed-funds rate in a range of 4.25% to 4.5%. However, government data shows on Friday the U.S. economy gained a surprisingly strong 261,000 new jobs in October, surpassing a Dow Jones estimate of 205,000 additions. Perhaps more encouraging for the Fed, the unemployment rate rose to 3.7% from 3.5%.

Related: Here’s why the Federal Reserve let inflation run up to a 40-year high and how it roiled the stock market this week Powell said Wednesday that there remains a chance that the economy can escape a recession, but that window for a soft landing has narrowed this year as price pressures have been slow to ease.

 

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What Marketwatch wants to say: Did we mention that the Fed Chief is White?

I made this video last week, I have been trading since 1994

Gradually raising rate never work. You would raise 500 points at once and be done with it.

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