After moving significantly lower over the course of the previous session, stocks are seeing further downside in morning trading on Wednesday. The major averages have slid into negative territory, with the tech-heavy Nasdaq showing a particularly steep drop.
Currently, the major averages are off their worst levels of the day but still firmly negative. While the Nasdaq is down 336.67 points or 2.4 percent at 13,867.50, the S&P 500 is down 55.99 points or 1.2 percent at 4,469.13 and the Dow is down 239.66 points or 0.7 percent at 3,401.52.
Renewed worries about the outlook for monetary policy continue to weigh on Wall Street amid concerns the Federal Reserve plans to tighten monetary policy more aggressively than previously anticipated.
Fed Governor Lael Brainard’s comments from Tuesday continue to generate selling pressure, as she predicted the Fed would start reducing its balance sheet at a “rapid pace” as soon as the May meeting.
Philadelphia Fed President Patrick Harker also weighed in on the outlook for monetary policy in remarks to the Delaware State Chamber of Commerce this morning.
Harker said he is “acutely concerned” about the elevated rate of inflation and forecast a series of “deliberate, methodical” interest rate hikes this year.
Later in the day, the Fed is scheduled to release the minutes of March meeting, which may shed additional light on the central bank’s thinking about the outlook for interest rates.
At the meeting, the Fed decided to raise interest rates for the first time since December 2018 and forecast rates would reach 1.9 percent by the end of the year.
A number of media outlets have said the forecast points to six quarter-point rate hikes this year, but recent comments from Fed officials have suggested the central bank could opt to raise rates by 50 basis points at upcoming meetings.
CME Group’s FedWatch tool is currently indicating a 76.6 percent chance the Fed will raise rates by 50 basis points next month.
The continued weakness on Wall Street…
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