What the Fed meeting means for the stock market

Jerome Powell

The Fed chair will hold a press conference after the Federal Reserve meeting on Wednesday.

(Photo: AP)

Frankfurt Many investors have had a black week. The US stock exchanges recorded the highest losses in more than a year. The broad S&P 500 index fell more than 5 percent over the week, while the Nasdaq tech index fell nearly 8 percent. The balance of the Dax was weak with a minus of around 1.9 percent.

The significant losses have one reason above all: Investors fear an even more abrupt change of course in American monetary policy. Several representatives of the US Federal Reserve have recently indicated faster rate hikes and an imminent reduction in the balance sheet.

Such tighter monetary policy is usually bad for stock markets. Investors’ eyes will therefore be all the more focused on the Fed meeting and the press conference by US Federal Reserve Chairman Jerome Powell on Wednesday in the coming week.

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