The Federal Reserve has decided not to come to the rescue this time. All of the economic numbers tell us that the economy is slowing down, and on Wednesday Fed Chair Jerome Powell even admitted that economic conditions are “softening”, but the Federal Reserve raised interest rates anyway. As one top economist put it, raising rates as we head into an economic downturn is “economic malpractice”. They know that higher rates will slow down the economy even more, but it isn’t as if the Fed was divided on this move. In fact, it was a unanimous vote to raise rates. They clearly have an agenda, and that agenda is definitely not about helping the American people.
Early on Wednesday, Wall Street seemed to believe that the Federal Reserve would do the right thing, and the Dow was up nearly 400 points. But then the announcement came, and the market began sinking dramatically.
The Dow Jones Industrial Average lost 720 points in just two hours, and the Dow ended the day down a total of 351 points. This is the lowest that the Dow has been all year, 60 percent of the stocks listed on the S&P 500 are in bear market territory, and at this point approximately four trillion dollars of stock market wealth has been wiped out.
We haven’t seen anything like this since the last financial crisis. This is officially the worst quarter for the stock market since the fourth quarter of 2008, and it is the worst December that Wall Street has experienced since 1931.
It is insanity to raise interest rates when stocks are already crashing, but the Federal Reserve did it anyway.
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