Xinhua News Agency, New York, January 4Summary | New York stock market fell after expectations of interest rate cut were thwarted
Xinhua News Agency reporter Liu Yanan
The three major stock indexes in New York fell on the 3rd as the minutes of the last monetary policy meeting released by the Federal Reserve showed that there was no discussion on when to start cutting interest rates, which disappointed the market and investors took profit-taking operations.
As of the close of the day, the Dow Jones Industrial Average fell 284.85 points from the previous trading day to close at 37430.19 points, a decrease of 0.76%; the S&P 500 Stock Index fell 38.02 points to close at 4704.81 points, a decrease of 0.80%; Nasdaq The Gram Composite Index fell 173.73 points to close at 14592.21 points, a decrease of 1.18%.
The minutes of the Federal Reserve’s December 2023 monetary policy meeting released on the 3rd showed that participating officials believed that the Fed had made “obvious progress” in reducing high inflation and that the federal funds rate “may be at or near the peak of this tightening cycle.” However, the participating officials did not discuss when to start cutting interest rates, while retaining the option of “raising interest rates once inflation rises again.”
At the same time, Thomas Barkin, president of the Federal Reserve Bank of Richmond, said on the same day that the recent significant decline in long-term Treasury yields may stimulate demand for interest-sensitive sectors such as housing, which is not conducive to combating inflation. Therefore, the Federal Reserve is still likely to continue to raise interest rates. .
Affected by the above factors, the U.S. 10-year Treasury bond yield once rose above 4% that day, putting further pressure on the stock market.
Data released late on the 3rd by the CME Fed Watch Tool showed that the market believed that the probability of the Federal Reserve cutting interest rates at the March monetary policy meeting was 72.6%, significantly lower than the 79% the previous day.
Steve Eisman, senior portfolio manager of Newberg Berman Holdings Inc., said that the New York stock market has risen significantly in the past period, and it is normal for the market to adjust.
Brian Mulberry, a client portfolio manager at Zacks Investment Management in the United States, said that the rising momentum of the New York stock market since December last year mainly comes from expectations of a shift in monetary policy, but economic data may not allow monetary policy to be as market expected. Turn quickly. The Federal Reserve remains committed to achieving its 2% inflation target, but the U.S. core personal consumption expenditures price index remains well above 2%, and high interest rates may last longer.
2024-01-04 08:25:13
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