Wall Street Shrugs Off ‘Fed’s Tough Talk’ to Cheer Smaller Hikes
- Powell comments were ‘reassuring’ to markets: Krosby
- ‘Fed lost a chance to really reset market expectations’: Thin
Jerome Powell exits after speaking during a news conference following a FOMC meeting in Washington, DC, on Feb. 1.
Photographer: Al Drago/BloombergWall Street had widely expected that the Federal Reserve would ease up on its pace of rate hikes to battle inflation on Wednesday. But despite the central bank’s efforts to emphasize that it wasn’t going to stop hiking any time soon, markets rallied after traders decided that the finish line was in sight.
The unanimous decision to raise the benchmark rate target by 25 basis points followed a 50 basis-point hike in December where the same language — “ongoing increases in the target range will be appropriate” — had been used. In his news conference, Chair Jerome Powell tried to hammer home the point that policy would stay restrictive “for quite some time.”