Dow falls 252 points on recession fears

Dow Jones Industrial Average It dropped 252.40 points, or 76%, to close at 33,044.56, the S&P 500 shed 0.76% to close at 3,898.85, and the Nasdaq shed 0.96% to close at 10,852.27.

In addition, the market was pressured by the rebound in US Treasury yields. After revealing the number of people requesting unemployment benefits decreased. This will be a factor supporting the Fed’s interest rate hike.

The increase in the yield of the 10-year US government bond, which is the US government bond used as a reference in determining the price of bonds around the world. This includes the US mortgage interest rate. will allow consumers to have less money for spending While the cost of paying off a mortgage loan is increasing. And companies will face higher costs from debt repayment. causing these companies to reduce investment and reduce dividend payments to investors.

Investors keep an eye on economic numbers. and statements by Fed officials looking for signs of the direction of the Fed interest rates.

JPMorgan Chase chief executive Jamie Dimon said interest rates will rise higher than the Fed currently forecasts. because inflation remains high

“I think interest rates will bounce above 5% as core inflation remains high. And this is not going away so quickly,” Dimon said at the World Economic Forum (WEF) in Davos. Switzerland

However, in the policy interest rate forecast (Dot Plot) at the meeting in December 2022 Fed officials expect to continue to raise interest rates in 2023 and not cut them until 2024, with the Fed raising rates as high as 5.1% in 2023 before the cycle ends. interest rate hike The level was the highest since December 2007.

After the Fed raises interest rates to 5.1% in 2023, or equivalent to the 5.00-5.25% target range, the Fed will keep interest rates at that level for some time. to keep an eye on the impact of tightening monetary policy on the US economy