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Wall Street set to open sharply lower on angst over hawkish Fed
Economy 2 hours ago (Dec 15, 2022 09:21AM ET)
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By Sruthi Shankar and Ankika Biswas
(Reuters) -Wall Street's main stock indexes were set to open sharply lower on Thursday, as the Federal Reserve's guidance to stick to protracted policy tightening quelled hopes of the rate-hike cycle ending anytime soon.
The U.S. central bank hiked rates by 50 basis points (bps) on Wednesday, slowing down from four back-to-back 75 bps hikes, although Fed Chair Jerome Powell said recent signs of slowing inflation have not brought any confidence yet that the fight had been won.
The Fed's policy-setting committee projected it would continue raising rates to above 5% in 2023, a level not seen since a steep economic downturn in 2007.
«The issue was the market was looking for rate cuts in 2023 and that's not compatible with any credible economic scenario because you'd need to have quite a collapse in economic activity and a speedy deterioration of the labor market,» said Willem Sels, global CIO, private banking and wealth management at HSBC.