Last month, the Fed began reducing its purchases of Treasuries and mortgage-backed securities from $120 billion per month at a pace that would put it on track to end purchases by mid-2022. Powell has long insisted that inflation is 'transitory' and will soon disappear, and his change of tone panicked investors who fear that an accelerated end to easy money policies will put a damper on high-flying growth stocks. Economists fear the figure for November - set to be released in the coming days - could soar even higher. Inflation hit 6.2 percent in October, the highest figure since November 1990, and far above the Fed's two per cent target. In testimony to Congress, Fed Chair Powell admitted that 'the risks of higher inflation have moved up' and signaled that the central bank may finally have to take tough action to tackle rising prices. The Consumer Price Index rose 6.2 percent in October 2021 from one year prior
Wednesday's fall of 460 points also came as Federal Reserve Chairman Jerome Powell admitted that tough measures might be required to reign-in inflation. The markets, which were trending down throughout November, saw the biggest drop when the White House announced that the first case of the omicron variant had been found in San Francisco.Īs of Thursday, the US confirmed one more case of the variant in Minnesota. 'Even though these short bouts of volatility are surprising and certainly have sent a chill through markets, we still have a significant bank of equity returns to enjoy year to date,' Aoifinn Devitt, chief investment officer at the Moneta Group, told Bloomberg. Dow ended the day with a 1.8 percent increase, while the S&P an Nasdaq ended at about 1.4 percent upĭespite the dip, which triggered the biggest back-to-back selloff since October 2020, investors hoped for a renewed vigor in the stock market following Thursday's rally. The Dow Jones, Nasdaq Composite and S&P 500 all saw upswings on Thursday.
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