Wall Street finished sharply lower on Monday, closing out a global market rout that saw Japan’s main stock index suffer its worst day in 37 years. Wall Street’s benchmark S&P 500 dropped 3 per cent, its sharpest one-day drop since September 2022, while the tech-dominated Nasdaq Composite fell 3.4 per cent.
While the economy was still “relatively strong”, the Fed needed to get rates to about 4 per cent “sooner rather than later”, Rieder said. However, others said a rapid fall in rates was unrealistic and an emergency move could be counterproductive and create panic. “I think the market has gotten completely ahead of itself in terms of interest rate cuts being priced in at this point,” said John McClain, portfolio manager at Brandywine Global.