This report is from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. The Federal Reserve raised interest rates by 25 basis points on Wednesday, taking its overnight borrowing rate to a target range of 4.25%-4.5%. In the Fed's dot plot indicating expectations for rates in the years ahead, the central bank mostly indicated that rates will remain higher for longer.
Shares of Micron Technology have fallen sharply this year, even though it beat earnings expectations for its last quarter. For the current quarter, Micron expects revenue to come in around $7.9 billion. That's far less than the $8.98 billion expected by analysts. The stock market took a battering after digesting the Fed's forecast that monetary policy in 2025 will remain tighter than previously forecast. CNBC's Sarah Min looks at why Wednesday's dramatic sell-off in markets is a stark reminder that forecasts influence stock movements much more than current circumstances. The Fed cut its key interest rate by 25 basis points. Borrowing costs will go down and corporate investment should be stimulated, which should lead to job creation and boost growth. That, in turn, theoretically pushes up stocks. But investors were already confident about the Fed's cut Wednesday. Prior to the conclusion of the Fed's December meeting, the futures market indicated a 98% chance of a 25 basis points cut. That means investors had already priced in the benefits of the rate reduction into stocks. In other words, yesterday's cut would have little bearing on stock prices. Investors were perhaps pricing in even more optimism than that single reduction in rate
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