Dow Drops 751 Points as Fed Lifts Rates to 4% and Warsh Flags Inflation
Updated
Updated · CNBC · Sep 15
Dow Drops 751 Points as Fed Lifts Rates to 4% and Warsh Flags Inflation
1 articles · Updated · CNBC · Sep 15
Summary
751 points vanished from the Dow after the Fed raised rates by 25 basis points to a 3.75%-4% target range, its first hike since July 2023.
Warsh's press conference drove the selloff deeper after he said inflation remained too high and signaled another increase could still come this year.
The 10-year Treasury yield climbed back above 5%, reinforcing fears the Fed may still be behind inflation and that higher borrowing costs will persist.
Bank of America and Wells Fargo each fell 3% as investors worried higher rates would curb lending and growth; the S&P 500 lost 0.5% and the Nasdaq 0.4%.
Fresh cost pressures are already building, with U.S. diesel at $6 a gallon and crude above $100 a barrel amid supply strains tied to the Ukraine and Iran wars.
With Treasury yields topping 5% and diesel soaring, is the Fed's latest rate hike pushing the US economy toward an unavoidable breaking point?
As Kevin Warsh abandons traditional forward guidance, could the Fed's aggressive stance on sticky inflation accidentally trigger a severe financial sector crisis?
While the broader market bleeds from high borrowing costs, why are AI and semiconductor investments seemingly immune to the hawkish reality?