Inflation Leads to a decrease in Stock prices
U.S. stock indexes took a big hit on Friday, February 24th after an inflation gauge might lead to a stronger-than-expected raise in interest rates soon.
The heavy tech-weighted Nasdaq composite fell 1.8%, The S&P 500 dropped 1.5%, and The Dow Jones Industrial fell 1.3%. All three of these decreases in price will lead this holiday week in the red even though there were big gains Thursday.
The stock market had a tremble in the month of February with a constant change in inflation. There has been positive growth for the U.S. economy but there have been concerns on what is the next move for the Fed and if they will keep interest rates higher at a steady level to keep inflation under control.
With the economy being on a positive outlook, investors are giving up on the fact that the Fed will be quick to lower interest rates once it has finished raising them, said David Donabedian, chief investment officer at CIBC Private Wealth US.
The economy has been adaptable in this tough time with high-interest rates that many investors didn’t expect, but they are hopeful that Fed will be able to keep inflation under control and keep the economy in a good state without causing too much damage.
Written by: Jeffrey Nugent