on Wednesday and revised economic projections higher with warnings that the battle against inflation was far from over, prompting a weak session for Wall Street.
The benchmark interest rate could be hiked one more time in 2023 to a peak range of 5.50%-5.75%, while monetary policy could stay tighter than was expected through 2024, the Fed's updated quarterly projections showed. "Our economists were expecting cuts in each of the four quarters of next year, but now they think the first cut will be delayed until sometime in the second quarter," said Sam Stovall, chief investment strategist at CFRA Research in New Yorkunexpectedly fell last week, while the Philadelphia Fed's business conditions index reading showed a worse-than-expected drop in September, fueling recession concerns.
"With interest rates like that and with other measures of the economy showing weaker-than-expected readings, the increasing concern is that we are headed for a recession," Stovall added., known as Wall Street's "fear gauge", hit its highest level in nearly one month, reflecting rising investor anxiety.Traders' bets on the benchmark rate remaining unchanged in November and December stood at 72% and 53%, respectively, according to CME's FedWatch tool.