The markets closed ending another week in the red with the Dow, S&P, and Nasdaq all down around a percent. CNBC’s Bob Pisani reports on how the Federal Reserve’s recent interest rate hikes to combat inflation are scaring off investors as recession fears remain high.
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#Recession #Fed #Nasdaq…(read more)
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The recent drop in the stock markets after the Federal Reserve announced new rate hikes has brought back concerns of a possible recession. The fear of an economic downturn has been looming for some time now, and this latest event only adds fuel to the fire.
The Federal Reserve increased interest rates by a quarter-point, bringing the benchmark rate to 2.25 percent. This marks the third rate hike this year, which is a signal of the central bank’s confidence in the economy. However, the stock markets did not respond positively to this announcement, with the Dow Jones Industrial Average dropping more than 800 points in just two days.
The stock market is often seen as a barometer of the economy’s health, and such a significant drop in such a short time has caused concern among investors and analysts alike. The market’s reaction to the Federal Reserve’s announcement indicates that many believe the economy may be slowing down.
The fear of a recession is not new. Months before the announcement, there were already signs that the economy may be slowing down. Some of these indicators include a slowdown in global trade and manufacturing, rising debt levels, and a flattening yield curve.
The yield curve is the difference between the yields of short-term and long-term government bonds. A flattening yield curve is often seen as a warning sign of a possible recession. In August, the yield curve for the two-year and ten-year Treasury notes reached its flattest point since 2007, just before the last recession.
While the Federal Reserve’s rate hikes may be intended to prevent a future inflation problem, they could also lead to an economic slowdown. Higher interest rates could lead to higher borrowing costs for businesses and consumers, potentially leading to a decrease in spending.
There are also concerns about the impact of the ongoing trade war between the United States and China. The tariffs imposed by both countries could lead to higher costs for businesses and consumers, leading to a slowdown in economic growth.
In conclusion, the recent drop in the stock markets after the Federal Reserve’s announcement of rate hikes has brought back concerns of a possible recession. The economy has been showing signs of slowing down for some time now, and this latest event has only added to those fears. While the exact impact of these developments remains to be seen, it is crucial for investors and businesses to remain vigilant and adapt to changing economic conditions.
The only thing you can do is make sure you're ready and plan accordingly because recessions are a natural part of the economic cycle. I began my career during a recession (2009). Aerial acrobatics on cruise ships was my first job out of college. I've developed my own business, am a vice president at a large corporation, own three rental homes, invest in stocks and businesses, and have seen a growth in my net worth of $$k over the past four years.
Were any of these clowns around for the crash during the Fall of 2008? Now that was scary…watching Lehman Bros collapse was pure terror.
stock market : a big ponzi scheme
Recession cannot touch Indians .
It’s part of the build back broke program, brought to you by the Democrat ran Government!
Just wait till the layoffs come. After Christmas we will see Bidens economic plan take place. Remember bailing out the banks under the great king Obama. Their false god?
With inflation currently at about 10%, my primary concern is how to grow my reserve of $240k which has been sitting duck since forever with zero to no gains, sure I'm all in on the long term game, but with my savings are lying waste to inflation and my portfolio losing gains everyday, I need a remedy asap.
And all you Americans really loved that stimulus money now you're going to pay for it with some pain
None of this was an issue or even a concern when Trump was in office
Ladies and gentlemen….Biden and the Democrats…have derailed the train!
I'm so opportuned irrespective of the economic crisis and financial conditions I am still able to earn $33,500 returns from my initial $6,500 every 10days with Edward
Come on, man! We did it way better a week ago!
Bring back Ben Collins and say no to oligarchs
I had no idea I was supposed to be feared of nombers! I am unclear on how to shoot inflation when it breaks in my house