{"id":1926262,"date":"2023-05-07T17:44:20","date_gmt":"2023-05-07T21:44:20","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wall-street-isnt-celebrating-the-feds-latest-rate-hike\/"},"modified":"2023-05-07T17:46:12","modified_gmt":"2023-05-07T21:46:12","slug":"wall-street-isnt-celebrating-the-feds-latest-rate-hike","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wall-street-isnt-celebrating-the-feds-latest-rate-hike\/","title":{"rendered":"Wall Street not happy with Fed&#8217;s recent rate increase."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fwall-street-isnt-celebrating-the-feds-latest-rate-hike%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1926262&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>Wall Street Pessimistic as Markets Brace for Rate Cut<\/h2>\n<p>Markets may have just survived the last of the most <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-chair-aggressive-rate-hikes-may-be-needed-to-tame-inflation\/\" title=\"Fed Chair: Aggressive Rate Hikes May Be Needed To Tame Inflation\">aggressive rate hikes<\/a> in four decades. However, few on Wall Street are celebrating. If Wednesday\u2019s quarter-point hike marked the peak of the cycle in the US, as <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wall-street-isnt-celebrating-the-feds-latest-rate-hike\/\" title=\"Wall Street not happy with Fed's recent rate increase.\">market-implied odds suggest<\/a>, the prospects for risk assets look glum. That\u2019s in sharp contrast to the prior seven tightening cycles, where the final hike has almost always driven rallies in stocks and riskier credit. The one exception came at the end of the dot-com era in 2000 when recession pressures were beginning to build in the economy.<\/p>\n<h3>What\u2019s different now?<\/h3>\n<p>Swaps traders expect the Federal Reserve\u2019s next move will not be an extended pause, but instead a rate cut, perhaps as soon as July. Such a U-turn to easy policy suggests a recession that will force the central bank\u2019s hand. Add beaten-down US regional bank stocks and tepid profit forecasts from Corporate America into the mix, and the outlook is grim.<\/p>\n<h3>Strategists at Wall Street\u2019s largest banks are similarly pessimistic:<\/h3>\n<ul>\n<li>Morgan Stanley predicts the S&#038;P 500 will decline to 3,900 by the end of the year as the economy slows<\/li>\n<li>Goldman Sachs sees no post-pause gains for US stocks in the second half, forecasting the S&#038;P 500 will end the year at 4,000<\/li>\n<li>Bank of America Corp. strategists urge investors to \u201csell the last rate hike\u201d and also see the S&#038;P 500 rounding out the year at 4,000<\/li>\n<\/ul>\n<p>Many risk assets have already priced in a turn in Fed policy \u2014 but not the economic damage that may come along with such a pivot. Corporate balance sheets are in better shape this time, but the bond market is signaling impending recession. Virtually the entire Treasury curve is inverted, a reliable harbinger of an economic slide.<\/p>\n<p>Morgan Stanley strategists recommend investment-grade fixed income. High-grade credit has posted gains after every Fed pause since 1984 and delivered an average return of 9.6%. But <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/canada-hikes-interest-rates-1\/\" title=\"Canada Hikes Interest Rates 1%\">inflation remains stubbornly high<\/a> and that will pressure profits.<\/p>\n<p>Expectations for steep rate cuts are building. Swap contracts linked to Fed meeting dates have been tumbling as markets are pricing in around 70 basis points of cuts by the end of the year.<\/p>\n<p>\u201cWe can\u2019t see how the Fed would be cutting rates in the absence of a meaningful slowdown in the US economy,\u201d said Johanna Kyrklund, <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-plans-to-unveil-advisory-warning-for-americans-doing-business-with-deteriorating-hong-kong\/\" title=\"Biden Plans To Unveil \u2018Advisory\u2019 Warning For Americans Doing Business With \u2018Deteriorating\u2019 Hong Kong\">chief investment officer<\/a> at Schroder Investment Management Ltd., who is bearishly positioned on US equities. \u201cSomething has to give.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Bloomberg) &#8212; Markets may have just survived the last of the most aggressive rate hikes in four decades. Few on Wall Street are celebrating.Most Read from BloombergBuffett Reaffirms Abel as Heir, Blames Bank Leaders for FailuresKimora Lee Says $93 Million US Wants From Tim Leissner Is Hers\u2018We Just Want Someone Sane\u2019: What Happens When a<\/p>\n","protected":false},"author":1,"featured_media":1926263,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[6617,4142,5476,6366,4355,4354],"class_list":["post-1926262","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-feds","tag-happy","tag-increase","tag-rate","tag-street","tag-wall"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1926262","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1926262"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1926262\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1926263"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1926262"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1926262"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1926262"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}