The Dow Jones shed 1.08% to 34,960.69 points, the largest drop in the past month. Also, the S&P 500 fell 1.07% to 4400.27 points, which is also its worst reading since July 19. This time, the Nasdaq Composite Index was the least susceptible to penalties, but was in the red, dropping 0.89% to 14,525.91 points.
The indices were under pressure from the minutes of the Fed meeting on July 27-28, published in the late afternoon. The documents show that most FOMC members point to a “gradual decline” later this year, although other officials are betting that the “real” stimulus cuts will only begin in the early months of 2022, giving time for improvements that remain in labor market.
“The protocol reflects the state of the Fed, which is ready to foresee a ‘shrinking’ calendar, possibly over the next few months,” Cornerstone Wealth analyst Sean Bandazian told Bloomberg.
“There is still reason to believe that we will see volatility in the most interest-rate sensitive areas of the market,” he added.
This is despite the fact that St. Louis Fed President James Bullard indicated this morning that he prefers a gradual cut before starting only in the first quarter of next year and that he considers it “logical” that the last quarter of 2022 is suitable for a first rate hike. …
Other elements of the FOMC, such as Robert Kaplan of the Dallas Fed and Esther George of the Kansas City Fed, are pushing for stimulus lifting to begin as early as September.
Next week, the Fed will meet for its annual symposium in Jackson Hole, expecting analysts to see clearer signs of which calendar the Federal Reserve should choose to begin easing support for the economy.
