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Wall Street falls on global interest rate hikes

The UK’s central bank has raised key interest rates by another 0.5%. The Swiss central bank raised its benchmark lending rate by 0.75 percentage points, its highest ever, and said it could not rule out further hikes. Central banks in Norway and the Philippines also raised interest rates.

The Federal Reserve and other central banks are raising interest rates to make borrowing more expensive. The goal is to slow economic growth enough to keep inflation under control, but not enough to send the economy into recession. Wall Street worries the Fed may be putting too much of a brake on an already slowing economy, making it more likely to slip into a recession.

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Fed Chairman Jerome Powell on Wednesday underscored his resolve to raise interest rates high enough to push inflation back toward the central bank’s 2% target. He said he was just beginning to reach that level. The US Central Bank has raised the benchmark interest rate that affects many consumer and corporate loans from he 3% to he 3.25% range. This is the fifth rate hike of the year and a start of the year from zero.

The Fed also released a forecast, known as the ‘dot plot’, showing that it expects the benchmark interest rate to reach 4.4% by the end of the year.

The company is nearing the end of the third quarter and gearing up for its next big earnings report, but early reports are trickling in. Homebuilder Lennar rose 2.6% after reporting strong third-quarter results. Homebuilder KB Home fell 4% after warnings about problems in his supply chain and a complicated financial report.

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Wall Street falls on global interest rate hikes

Source link Wall Street falls on global interest rate hikes

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