Jittery investors will be closely watching the Federal Reserve’s decision on interest rates Wednesday. The stock market has suffered a deep decline so far…
Jittery investors will be closely watching the Federal Reserve’s decision on interest rates Wednesday.
The stock market has suffered a deep decline so far this month, with the broad Standard & Poor’s 500 stock index sinking 7.8 percent, its worst start to December since the Great Depression in 1931, according to Bespoke Investment Group.
A big reason for the slide is a growing fear on Wall Street that the Fed, led by Chairman Jerome Powell, will make a policy mistake and hike interest rates too high and cause the economy to slow markedly.
In early trading Wednesday, the Dow Jones industrial average was up 65 points ahead of the Fed’s decision at 2 p.m. ET.
The mood on Wall Street has also turned darker due to signs of slowing growth around the globe, the fallout from the U. S.-China trade dispute and a decline of more than 35 percent in the price of U. S.-produced crude. All these factors are «screaming slowdown,» says Gary Kaltbaum, president of Kaltbaum Capital Management.
That’s why Wall Street is looking for the Fed to back off its plans of gradual increases in borrowing costs, which they have been saying is necessary to avoid a spike in inflation and an overheating economy.
Investment pros say the Fed decision will provide a road map for where rates might be headed in 2019 and could influence the direction of the Dow and 401(k) balances in the year ahead.
