Wall Street walloped by Fed fallout, shutdown fears

Federal Reserve raises interest rates, signals fewer hikes ahead

Here's Republican Andy Barr of Kentucky grilling Powell in February: "Your task is to continue to unwind the Fed's asset purchases, gradually, and predictably return to market-based interest rates, and remove monetary distortions from the economy without producing excessive disruption.”".

Italy's 10-year yield plunged 17 basis points to 2.77 per cent.

"We have brought that down a bit and now think it is more likely that the economy will grow in a way that will call for two interest rate increases over the course of next year", the Federal Reserve Chairman said.

An afternoon recap of the day's most important business news, delivered weekdays.

USA stocks wall climbed on Wednesday, boosted by technology stocks, and financials also gained ahead of a highly awaited Federal Reserve announcement where investors will watch for signals of fewer rate hikes, which could spark a year-end rally.

"The indices are headed for another volatile, negative session as options expirations, turmoil in the White House and a renewed possibility of a partial government shutdown continue to shatter the nerves of investors", said Peter Cardillo, chief market economist at Spartan Capital Securities in NY.

But like anyone seeking a compromise, Powell ended up making few people happy.

Global financial markets, including Wall Street stocks, had been hoping for a more dovish policy outlook and sold off broadly.

Investors registered their displeasure with the Fed's tightrope-walking by sending stocks sharply lower.

All three major indexes are down more than 12% in December. Silver added 0.8 percent to $14.82 an ounce.

While the Nasdaq came within a whisker of bear market territory on Thursday, other segments of the market, including the Russell 2000 .RUT small-cap benchmark and the Dow Jones Transport Average .DJT are already in bear market territory.

Dodgers Trading Yasiel Puig, Matt Kemp and Alex Wood to Reds
The Dodgers still have Joc Pederson , Chris Taylor, Cody Bellinger and Kike Hernandez available to play outfield after the trade. The former Washington Nationals star is looking for upward of $300 million, and the Dodgers are among the teams pursuing him.

There was a lot of information released by the Fed for investors to digest.

The decision stands to affect rates on all kinds of borrowing, from home mortgages to credit cards.

Just this week the Fed's projections showed a slowing economy and a slowing set of rate increases, while its statement was a bullish recount of United States strength.

The 3.7 percent jobless rate at a 49-year low is arguably the Fed's touchstone achievement of the post-financial crisis era.

The central bank chose to increase its target range for the benchmark rate by 0.25 percentage point to 2.25 to 2.50 percent, it said in a statement issued after a two-day meeting of the policy-setting Federal Open Market Committee.

Even routine changes at the top of central banks create uncertainty in markets as investors try to assess how tough a new leader may be in preventing the economy from overheating and accelerating inflation. The Fed forecast one rate increase in 2020. The rates were also hiked in March, June, and September.

For the week, the Dow lost 1,655 points, or 6.9%. But bond prices surged, sending yields lower.

At prior meetings, Mr Powell has emphasised near record low unemployment rates as well as inflation, which is around the Fed's 2% target. President Donald Trump said there was a very good chance a government funding bill, which included funding for a wall along Mexico border, would not pass the Senate.

Chinese markets have been in the front line of worries this year amid trade tensions with the U.S. The Hang Seng index in Hong Kong rose 0.5 percent Friday, but is down 22 percent since late January. The Federal Reserve Act says governors may be "removed for cause by the President".

"Moving forward, my colleagues and I will be watching the economy closely for indications that the stance of policy is appropriate to sustain the expansion with a strong labour market and inflation near two per cent", Powell said.

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