Moments Ago
Here’s what the market is doing ahead of the Fed’s decision
Stocks ticked higher as the Federal Reserve’s 2 p.m. ET rate decision announcement approached.
As of about 1:45 p.m., the S&P 500 gained 0.3%, and the Nasdaq Composite added 0.5%. The Dow Jones Industrial Average ticked higher by 0.1%.
Bond yields were lower, with the rate on the 10-year Treasury down about 6 basis points to 3.37%. The rate on the 2-year Treasury was 3.92%, down 5 basis points.
Oil prices fell. West Texas Intermediate crude futures fell nearly 4%, and Brent futures slipped 3.6%.
–Darla Mercado
18 Min Ago
Stocks could see a sharp rally if this winds up being the Fed’s last hike
Investors are awaiting the central bank’s next steps, and they could be rewarded if this interest rate hike is the last one in the Federal Reserve’s tightening cycle.
An analysis by CNBC Pro found that the stock market gets a boost one month to 12 months following the end of the Fed’s hiking cycle. The S&P 500 averaged an 8% gain and 21% return in the 3 months and 12 months following the final rate hike in a series.
–Darla Mercado, Brian Evans
18 Min Ago
Investors turn their focus to the Fed’s next steps
The market is all but certain that the Federal Reserve will push forward a 25-basis point rate hike this afternoon, bringing its benchmark funds rate to 5% to 5.25%.
The real question that’s bedeviling investors now is whether the central bank will indicate an end to its policy tightening or will it leave the door open for more interest rate increases to cool the economy.
A multitude of factors will weigh into the policy-setting Federal Open Market Committee’s next steps. Inflation has been on a cooling trend, with the March consumer price index rising 5% from a year ago – but it doesn’t seem to be slowing at a pace that would appease the Fed. Economic growth is also showing signs of slowing. April’s jobs report looms ahead, due out on Friday.
The recent trouble in the regional bank space, including First Republic’s failure and subsequent takeover by JPMorgan, could also factor into the decision.
This means what the Fed says in its statement with respect to forward guidance – and what Chair Jerome Powell details in his upcoming presser – are even more important this time.
Read more on what’s ahead for the Fed here.
–Darla Mercado, Jeff Cox
