Stock Market Down After Federal Reserve Chair Issues Warning on Inflation

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Sec. Yellen’s announcement that US Treasury is not considering ‘blanket insurance’ for all U.S. bank deposits also a contributing factor.

The stock market went up at opening today, with the hope that the Federal Reserve would soon be halting its interest rate hikes .

“We no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation. Instead, we now anticipate that some additional policy firming may be appropriate.”However, in his press conference, Powell reiterated his desire to tame inflation by saying that the Fed will do “enough” to bring inflation down to 2%, and that it will raise rates higher if it needs to.

“Should the stresses in the financial system be reduced in short order, we cannot rule out that stronger macro data will lead the Fed to put in additional rate hikes beyond May,” said Michael Gapen, an economist at Bank of America Securities.To be fair to Powell, U.S. Treasury Secretary Janet Yellen’s announcement that she has not considered or discussed “blanket insurance” to U.S.

 

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