Wall Street's main indexes posted their biggest weekly drop of 2023 as investors braced for the possibility of more aggressive rate hikes from the Federal Reserve after U.S. economic data pointed to resilient consumers
Jason Pride, chief investment officer of private wealth at Glenmede, said previous market cycles had witnessed similar delayed reactions by the market to rising interest rates and data releases, which helps explain volatile trading patterns as investors slowly adjust.
"This market has not yet realized the likelihood of a recession that we think is reality," he said, noting past rate hikes normally had taken between six and 18 months before their effects had fully filtered through into the economy. "We don't think a given, but there's a higher likelihood than the market has embedded in its thought process."to bets of at least three more rate hikes this year, with the peak rate seen in the range of 5.25%-5.5% by June.
Cleveland Fed President Loretta Mester said the Fed should raise interest rates higher than necessary if need be to get inflation fully under control. The Wall Street entrance to the New York Stock Exchange is seen in New York City, U.S., November 15, 2022. REUTERS/Brendan McDermid/File Photo
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