The Dow Jones Industrial Average had a bad morning today and lost nearly 700 points, putting it below 30,000 for the first time in almost two years.
Between the Fed’s monetary policy and continued concerns over inflation, traders could send stocks into a bear market. If the Dow closes below 29,439.72, it would be the first such instance since the Covid recession.
Treasury-bond yields also rose to their highest levels in more than ten years. The news of continuing interest-rate increases from the Fed encouraged other central banks to raise rates as well.
Goldman Sachs reduced its year-end outlook for the S&P 500 by 16 percent yesterday. “Based on our client discussions, a majority of equity investors have adopted the view that a hard landing scenario is inevitable and their focus is on the timing, magnitude and duration of a potential recession and investment strategies for that outlook,” analysts said.
The facts continue to fit the story of a stagflationary spiral. But the president apparently believes the economy is doing just fine. Reality will catch up eventually.