US Stocks Drop On The Fed's Economic Outlook
The stock market reacted negatively to the Federal Reserve's announcement about a fourth interest rate hike and potential hikes next year.
The U.S. stock market didn't seem too happy with the Federal Reserve's economic outlook Wednesday.
The Dow, Nasdaq and S&P 500 all hit 2018 record lows at some points following the central bank's announcement that it would hike the interest rate for a fourth time this year.
What investors appear more concerned with, though, is the Fed's 2019 outlook.
Federal Reserve Chairman Jerome Powell indicated that next year's forecast is still showing solid growth.
"2018 has been the strongest year since the financial crisis," he said. "During that period we've had low unemployment and strong growth, and inflation has still remained just a touch below 2 percent. So I do think that gives the committee the ability to be patient moving forward. As I mentioned, there's significant uncertainty about both the path and the ultimate destination of any further rate increases."
The central bank is now predicting two rate hikes for 2019 instead of three.
Investors had been looking to a slower rate hike pace from the central bank to help ease some of the recent market volatility fueled by global trade tensions, low oil prices and threats of a government shutdown.
They count on a balance between hiking rates steadily and raising rates too quickly, which experts say contributes to a recession. Some of the latest recession predictions see that happening in the next year or two.
Additional reporting from Newsy affiliate CNN.
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