11/15/2024

Wall Street Sinks on Powell Rate-cut Caution, Trump Cabinet Picks

The markets are dropping despite promises made by the president-elect

Wall Street's main indexes closed lower on Friday after Federal Reserve Chair Jerome Powell pointed to a slower pace of interest-rate cuts and investors reacted to cabinet selections by President-elect Donald Trump.

Powell on Thursday cited ongoing economic growth, a solid job market, and inflation above the U.S. central bank's 2 percent target as reasons it can afford to be careful with the pace and scope of future rate cuts.

Traders increased bets the Fed will not change rates at its December meeting, pricing in a roughly 42 percent chance, versus roughly 14 percent a month ago, according to the CME FedWatch tool. They also dialed back expectations for easing in 2025.

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