Fed rate hike fails to calm troubled markets as Dow falls 600 points. Expect more sharp swings in stocks and bonds.
By Joseph Adinolfi and Joy Wiltermuth
Fed Chair Kevin Warsh has sent investors a message: When it comes to tamping down inflation, he means business
Kevin Warsh sent markets a message on Wednesday: He and the Fed mean business on inflation.
Heading into Wednesday's Federal Reserve decision, investors were hoping an interest-rate hike from the central bank could steady a shaky bond market and take some pressure off stocks.
Unfortunately, that's not what happened. While U.S. stocks and bonds initially rallied after the Fed confirmed the rate hike and released its latest batch of projections, both markets ultimately finished the day lower.
By the time the closing bell rang, the Dow Jones Industrial Average DJIA had fallen by more than 600 points. The 10-year Treasury yield BX:TMUBMUSD10Y inched higher, finishing the day above the key 5% threshold despite a reprieve from surging crude-oil prices (CL00) (BRN00). Bond yields move inversely with prices, rising as prices fall, and vice versa.
During Fed Chair Kevin Warsh's postmeeting press conference, Warsh insisted that the...