Dow drops more than 100 points, worries Fed raises interest rates longer than expected | RYT9

The Dow is down more than 100 points, with Wall Street continuing its decline from yesterday’s heavy plunge.

At 8:49 pm Thai time, the Dow Jones Industrial Average was at 30,063.98, down 119.80, or 0.40%.

The Dow Jones Industrial Average fell more than 500 points yesterday. The Federal Reserve (Fed) raised interest rates by 0.75% as expected by the market. But the Fed continued to signal further rate hikes in 2023, disappointing investors who expected a rate cut next year.

In addition, investors are worried that the Fed’s rate hike will affect the growth of the US economy. The Fed lowered its forecast for gross domestic product (GDP) this year to 0.2%.

The Fed raised its short-term interest rate by 0.75% to 3.00-3.25 percent at its meeting yesterday. He also noted that the Fed will continue to raise interest rates until it reaches 4.6% in 2023.

In its policy interest rate forecast (Dot Plot), Fed officials do not expect any rate cuts until 2024. This caused the long-term interest rate to drop to 2.9%.

Fed officials predict interest rates will reach 4.4 percent at the end of the year and 4.6 percent at the end of 2023, before slowing to 3.9 percent in 2024 and flat at 3.9 percent in 2025. The long-term interest rate is 2.5% .

Investors expect the Fed will continue to raise interest rates in the remaining two meetings this year. After getting rid of the Dot Plot signal and a statement from Fed Chairman Jerome Powell at yesterday’s meeting

Markets expect the Fed to raise interest rates by 0.75% at its monetary policy meeting in November. and increased by 0.50% in December

The CME Group’s latest FedWatch Tool indicates that investors weigh 68.1% that the Fed would raise interest rates by 0.75% to 3.75-4.00% at its November 1-2 meeting and weigh 66.7% that the Fed would raise rates interest 0.50% to 4.25-4.50% at the meeting on 13-14 Dec.

If the Fed raises such interest rates as expected. This will lead to the Fed raising interest rates by 0.75% four times in a row at the June, July, September and November meetings. Meanwhile, the Fed’s policy rate will hit 4.25-4.50% by the end of the year. And it will keep the interest rate above 2.50%, the level the Fed considers neutral. neither too relaxed nor too strict


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