Economics
U.S. Stocks Tumble as Bets on Dovish Fed Go Wrong: Markets Wrap
- Fed cut projections for interest rates and economic growth
- Yet policy makers were still a bit more hawkish than expected
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U.S. stocks careened to a 15-month low after Jerome Powell failed to quell investor angst that the Federal Reserve’s tightening policy will throttle economic growth.
The S&P 500 Index dropped 1.5 percent after policy makers raised rates for the fourth time this year and lowered their forecast for hikes next year to two from three. Markets had been priced for just one. Treasury yields slid and the dollar erased losses as Powell said the Fed’s balance sheet normalization would continue “on automatic pilot.”