Stock Market Takes a Beating
May 5, 2022
Though largely positive yesterday after the Federal Reserve announced its biggest rate hike in 20 years, today the stock market reacted forcefully and in the opposite direction. The three main indexes all dropped by more than 3% at midday. Local stocks fared only slightly better as investors reacted to rising bond yields and concerns over the economy.
Cincinnati Business Courier report Steve Watkins asked our Jim Russell his perspective on the situation:
“The capital markets remain on edge as the combination of high inflation readings and the possibility of slower growth domestically place both stocks and bonds under pricing pressure,” said Jim. “Wednesday’s announcement from the Federal Reserve indicated that it will take higher interest rates over time to effectively combat inflation. It’s clear the Federal Reserve will slow the US economy through higher interest rate actions. What is unknown is how long this will take and how many actions will be needed to bring inflation under control. This degree of uncertainty is unsettling for investors, producing exaggerated pricing swings in recent days for stocks.”
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