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BREAKING: Stocks Tank After Cleveland Fed President Gives Grim Outlook On Inflation And Interest Rates

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2 years ago

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Just after the opening bell, all 3 major stock market indices plummeted after a concerning new inflation outlook from Cleveland Fed President Loretta Mester. The S&P 500 opened down 1.3%, the Dow Jones fell 1.01% and the NASDAQ dropped 1.61%.

Despite Biden and Fed Chair Jerome Powell promising the American people that inflation was “slowing down”, Mester said inflation is still too high and that rates will need to stay aboe 5% for the forseeable future.

Here’s more from Reuters:

Federal Reserve Bank of Cleveland President Loretta Mester said Thursday inflation remains too high and noted that she was open to raising rates by more than her colleagues wanted at their last monetary policy meeting.

The Fed “has come an appreciable way in bringing policy from a very accommodative stance to a restrictive one, but I believe we have more work to do,” Mester said in a speech text. “At this juncture, the incoming data have not changed my view that we will need to bring the fed funds rate above 5% and hold it there for some time to be sufficiently restrictive to ensure that inflation is on a sustainable path back to 2%,” she said.

Mester said “I continue to see the risks to the inflation forecast as tilted to the upside for a number of reasons.” She also said “the transition back to price stability will take some time and will not be without some pain.”

Here’s more info from CNBC:

More developments are expected from the Fed as the day goes on. Stay tuned for more…



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