Powell Open to More Aggressive Rate Hikes
- US stocks traded lower on Monday after Fed Chairman Jerome Powell signaled openness to raising interest rates more aggressively.
- Powell said at a conference that the Fed could raise interest rates by 50 basis points to tame inflation.
- Boeing stock dragged the Dow Jones lower after one of its commercial planes crashed in China.
US stocks traded lower on Monday, giving up a small portion of last week’s gains, after Fed Chairman Jerome Powell signaled openness to hiking interest rates more aggressively this year.
He told the NABE annual conference that there is potential for a 50-basis-point rate hike as the Fed tries to tame rising inflation. According to market bets, that half-point increase could come at the Fed’s meeting in May.
Boeing dragged the Dow Jones Industrial Average lower on Monday as its stock fell as much as 9% following the crash of one of its commercial planes in China. The plane, a 737-800, had 132 people on board. The plane is not Boeing’s MAX jet, which had been grounded in late 2018 due to two separate crashes.
Here’s where US indexes stood at the 4:00 p.m. ET close on Monday:
Both Russia and Ukraine are showing signs of digging in rather than progressing towards peace, with Russia demanding that Ukraine surrender the besieged city of Mariupol on Sunday. Ukraine rejected the notion that it would surrender Mariupol, and said surrendering any city is not an option.
Fears of a potential Russian default on its debt sent Russian bond yields to record highs, with the interest rate on the 10-year OFZ ruble bond skyrocketing to 19.7% before settling lower.
The volatility in nickel prices continued after it briefly soared to more than $100,000 per ton earlier this month, but this time the
was to the downside. Nickel prices fell 15% on the London Metal Exchange and triggered another limit down halt.
Legendary fixed-income investor Bill Gross warned investors that the Federal Reserve will “crack the economy” by hiking interest rates aggressively. Based on the Fed’s latest “dot plot,” the potential for a total of seven rate hikes in 2022 remains a possibility.
Bitcoin rose 0.60% to $41,093. Ether prices gained 2.27% to $2,911.
Gold rose as much as 0.55% to $1,939 per ounce. The yield on the 10-year Treasury jumped 15 basis points to 2.30%.