US stocks closed lower on Wednesday after a key inflation metric showed that prices increased over the year ended in June at the highest rate since 1981.
Investors fear that news, combined with still-strong employment numbers, will bolster the Federal Reserve’s hawkish attempts to lower inflation by tightening monetary policy.
While most financial institutions still predict a rate hike of 75 basis points, the market is currently pricing in a 81% probability that the central bank will increase interest rates by 1% later this month. That would be the largest hike in the modern era.
Bank of America analysts predicted a “mild” recession is coming to the US.
- The Dow lost 208 points, or 0.7%, on Wednesday.
- The S&P 500 fell 0.5%.
- The Nasdaq Composite dropped 0.2%.
NYC Journals 