Market Snapshot: Can the Fed tame inflation without further crushing the stock market? What investors need to know.

by | Sep 18, 2022 | Stock Market

The Federal Reserve isn’t trying to slam the stock market as it rapidly raises interest rates in its bid to slow inflation still running red hot — but investors need to be prepared for more pain and volatility because policy makers aren’t going to be cowed by a deepening selloff, investors and strategists said. “I don’t think they’re necessarily trying to drive inflation down by destroying stock prices or bond prices, but it is having that effect.” said Tim Courtney, chief investment officer at Exencial Wealth Advisors, in an interview.

U.S. stocks fell sharply in the past week after hopes for a pronounced cooling in inflation were dashed by a hotter-than-expected August inflation reading. The data cemented expectations among fed-funds futures traders for a rate hike of at least 75 basis points when the Fed concludes its policy meeting on Sept. 21, with some traders and analysts looking for an increase of 100 basis points, or a full percentage point. Preview: The Fed is ready to tell us how much ‘pain’ the economy will suffer. It still won’t hint at recession though. The Dow Jones Industrial Average
DJIA,
-0.45%
logged a 4.1% weekly fall, while the S&P 500
SPX,
-0.72%
dropped 4.8% and the Nasdaq Composite
COMP,
-0.90%
suffer …

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