The Fed: 5 things to watch when the Fed makes its interest-rate decision

by | Dec 12, 2022 | Stock Market

During the Federal Reserve’s last battle with high inflation in the 1970s and 1980s, Fed officials didn’t talk much at all publicly. When pressed for information on Capitol Hill about the outlook for the economy and interest rates, former Fed Chairman Paul Volcker would disappear behind a thickening cloud of cigar smoke. (Smoking was allowed at hearings in those days.) Forty years later, there will be no ashtrays in sight when Fed Chairman Jerome Powell holds a post-meeting news conference. And investors and economists are going to get a slew of information, not just smoke, from the central bank.

“After the Fed meeting, it’s going to be like information overload,” said Ryan Sweet, chief U.S. economist at Oxford Economics, in an interview. In general, economists expect a hawkish Powell Wednesday. Financial conditions have eased since the Fed’s November meeting, which doesn’t help dampen inflation. The yield on the 10-year Treasury note
has fallen sharply to 3.49% from 4.21% just after the Fed’s previous policy meeting. The S&P 500 stock-market index
also has gained ground.

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