Manage episode 295223594 series 2917102
US stock futures keep falling after yesterday’s sell-off.
Here's what is happening in the markets today, Thursday, June 17th.
The Fed moved up its timeline for rate hikes, seeing two increases in 2023 after Powell said in March that he saw no increases until at least 2024.
The Fed has 2 goals: employment and inflation. And Powell said progress toward the Fed’s goals was happening somewhat faster than expected. The central bank also said it sees inflation hitting 3.4% this year, well above its 2% long-term goal. They also raised their GDP expectations for this year to 7% from 6.5% previously. Their unemployment rate estimate remained unchanged at 4.5%.
Overall market losses were tame since the Fed’s update. Markets rallied off their intraday lows Wednesday after Fed Chair Jerome Powell said in its press conference 30 minutes after the meeting that projections for future rate increases should be “taken with a big grain of salt” and reiterated that he believes that inflation is transitory.
Powell also did not issue guidance on when the central bank will begin tapering its bond-buying program.
“You can think of this meeting that we had as the ‘talking about talking about’ meeting, if you’d like,” Powell said when asked about tapering. “I now suggest that we retire that term, which has served its purpose.”
The Fed chair said the central bank will continue to monitor the economic recovery and will provide “advanced notice” before announcing any updates regarding tapering.
The main reason why markets are lower is the higher inflation rate.
Tech stocks, which are more sensitive to rate hikes are trading lower. Zoom Video (ZOOM) and Tesla (TSLA) are down more than 1%.
Wells Fargo (WFC) and Citigroup (C) were higher in premarket trading on hopes higher rates will boost profits for banks.
Gold slides almost 3% after the Fed hints at faster rate hikes.
CureVac (CVAC) shares plunged 46.2% in the premarket after the German drugmaker reported disappointing results from a study of its experimental Covid-19 vaccine. The treatment was 47% effective in a clinical trial, compared to more than 90% for other mRNA-based vaccines from Moderna (MRNA) and Pfizer (PFE).
This wraps up today's stock market news.
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