Fed Ignores Trump and Hikes Interest Rates for 4th Time in 2018
The Federal Reserve on Wednesday hiked its benchmark interest rate for the fourth time this year, by one-quarter of 1 percent to 2.5 percent.
The Dow fell to its lowest level of the year after the announcement, ending the day down 352 points, or 1.5 percent, as investors reacted to the Fed adjusting its economic growth forecast for the U.S. economy downward.
At a press conference, Fed Chair Jerome Powell said the economy was ending the year “more subdued than most expected.”
Powell had a tricky task in trying to reassure markets that the economy is strong enough to take another rate hike while at the same time not tipping it into recession.
And he has been drawing fire from the man who appointed him, President Donald Trump, who has attacked the Fed on Twitter for raising rates and triggering a stock market sell-off.
And Tuesday, former Fed Chair Alan Greenspan unnerved investors when he declared the bull market all but over, telling CNN: “It would be very surprising to see (the stock market) sort of stabilize and then take off again.”
Although he could not predict exactly when the bull market would end, when the market does turn, investors need to be prepared to “run for cover,” Greenspan said.
Joining us to discuss the Fed’s rate hike and the outlook for the markets and the economy: Susan Schmidt, head of U.S. Equities at asset manager Aviva Investors; and Marc Horner, founder and financial advisor at Fairhaven Wealth Management.