Categories: Family Office, Financial NewsPublished On: May 12th, 2022Comments Off on Market Update15.8 min read
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On Wednesday, the Federal Open Market Committee (FOMC) announced a 0.5% interest rate hike, which was expected by the market. In addition, Fed Chairman Jerome Powell stated that the possibility of a future 0.75% interest rate hike is low. The announcement caused the stock market to rally (especially in the technology sector); the S&P 500 index rose nearly 3%. However, the markets subsequently fell again on Thursday, completely offsetting Wednesday’s gains.
The rebound after being oversold and sell off after rapid rise are reasonable explanations for current market behavior. In addition to the Fed’s monetary policy of raising interest rates, the Biden administration has also announced that it will sharply reduce the fiscal deficit by the end of September to control Consumer Price Index (CPI). With different policies all actively attempting to control inflation, it is very likely a recession will be triggered in the United States and around the world.
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