The Fed Put a Fork in the Stock Market (Video)
BY PETER SCHIFF
THEDAILYCOIN.ORG
DECEMBER 20, 2018
Seventh Rate Hike since Trump’s Election –
As expected, earlier today, the Federal Reserve nudged up the Fed Funds rate by another quarter point. The Fed is now targeting their rate at 2.25 – 2.5%. So the range is somewhere in the middle, there. This marks the sixth time the Federal Reserve has hiked interest rates since Donald Trump has been President, and the seventh time that the Fed has hiked rates since Trump was elected. Remember, during the entirety of Obama’s 8-year Presidency, the Fed raised interest rates only once.
A 900-point Selloff –
What the markets did not expect was the dovish hike to be so hawkish. In fact, the minute I heard the language, I was surprised that the Dow didn’t immediately sell off, more than it did. It had a bit of a bounce before it sold off, the Dow Jones ended up down just over 350 points. The selloff from the high to the low was just under 900 points. Earlier in the day the Dow had rallied up about 300 points because there was a lot of anticipation that even though the Fed was going to hike rates today, that it would indicate it would pause. That was on neutral – that it wasn’t really planning any more rate hikes for 2019, and would just play it by ear. It was going to be data dependent.
