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There it is. As expected, the Federal Reserve increased their key interest rate by 25 basis points to a corridor of 0.50% to 0.75%, the second rate hike in as many years.
Following the hike, stocks gyrated wildly but dropped soon after the decision. All three major indexes finished in the red with the S&P 500 leading the way downwards. The bond market also sold off with the short-end of the yield curve coming up the most, with the US Treasury 5 year yield increasing just over 12 basis points.
We’ve got all your coverage of the Fed hike and more, but first, the scoreboard:
- Dow: 19,792.53, -118.68, (-0.60%) S&P 500: 2,253.28, -18.44, (-0.81%) Nasdaq: 5,436.67, -27.16, (-0.50%) US 10-year yield: 2.541%, +0.061
The Fed hike came with little change to the policy statement. The hike was widely expected by markets, which did not prevent the sell-off. The Fed did little to change its statement on th economy, saying it will “expand at a moderate pace.” Fed Chair Janet Yellen dodged questions on President-elect Trump and said she did not advocate for running the economy hot. Yellen also said that she would not give advice to Trump on how to tweet during the post-meeting press conference. The FOMC now expects a total of three rate hikes in 2017. In addition, the long-run projection for interest rates was increased for the first time this cycle. In its economic outlook, the Fed slightly increased its projection of economic growth.The Fed now expects real GDP to grow around 1.8% to 1.9% in 2016, compared to its previous outlook of 1.7% to 1.9%. A gaggle of Tech executives met with Trump at Trump Tower. Executives from Silicon Valley ranging from Apple’s Tim Cook to Facebook’s Sheryl Sandberg to Amazon’s Jeff Bezos. Trump told the assembled group to call him “anytime” and there was “no chain of command around here.” Goldman Sachs named their new right-hand men to Lloyd Blankfein. Named Investment Banking head David Solomon and CFO Harvey Schwartz the new co-chief operating officers for the bank