Stocks close lower
Stocks finished lower as markets prepared for an additional Fed rate decision due out Wednesday.
The Dow Jones Industrial Average fell 79.75 points, or 0.24%, to 32,653.20, while the S&P 500 slid 0.41% to three,856.10. The Nasdaq Composite shed 0.89% to 10,890.85.
— Samantha Subin
A Fed pivot is way off, says Recent York Life’s Goodwin
Investors could also be getting a bit too enthusiastic about potential changes from the Federal Reserve, in response to Lauren Goodwin, economist and portfolio strategist at Recent York Life Investments.
Goodwin said in a note that she expected the Fed to hike by 0.75 of a percentage point on Wednesday and half some extent in December, but that the slowdown mustn’t be seen as the beginning of an enormous shift from the central bank.
“A Fed pause isn’t similar to a pivot. Actually, deteriorating economic and credit conditions could cause the Fed to pivot modestly sooner or later, but a full pivot into accommodative territory is very unlikely in the subsequent 12 months,” Goodwin said in a note.
Goodwin identified that the primary rate hikes should now start to indicate their impact across the broad economy, as a substitute of just housing. Nevertheless, the Fed will need several months of information to go its way before changing course.
“At this point, with inflation surprising as much because it has already, the Fed will wish to see clear signs of reversal in wage growth before pivoting. Recession must be considered a base case slightly than a risk,” Goodwin said.
— Jesse Pound
