Dow hits lowest point since 2020 as recession fears grow

Source: The Hill | September 23, 2022 | Tobias Burns

Markets are bottoming out as they process the latest interest rate hikes from the Federal Reserve in its battle to fight the highest inflation seen in 40 years.

The Dow Jones Industrial Average dropped below 29,400 midday Friday to its lowest point in nearly two years. Since the Fed started raising interest rates in March, the index has lost more than 13.7 percent of its value.

Other indices have followed suit. The S&P 500 fell below its previous 2022 low point, hitting 3,667 on Friday, down more than 15 percent since March and almost 23 percent on the year.

The technology-heavy Nasdaq hit 10,847, down almost 20 percent since March.

Interest rates have increased to 3.25 percent since the Fed started raising them from 0 percent in March. This has had the effect of making many goods and services more expensive, and driving down demand to bring down inflation.

Consumer inflation did come down slightly over the summer, falling to 8.3 percent in August from 8.5 percent in July and 9.1 percent in June. Core inflation, which excludes the volatile categories of energy and food, still rose more than half a percentage point from July to August.

But the little headway made by the Fed in fighting inflation comes at the price of slowing the economy and potentially even driving it into a recession, a trade-off that many market commentators don’t think is worth it.

……..

Tagged: , ,

Viewing 1 post (of 1 total)
Viewing 1 post (of 1 total)

You must be logged in to reply to this topic.