Stocks Fall As Inflation and Interest Rate Worries Rise

various credit cards and bills
Leslie Taylor-Grover
September 8, 2023

The stock market took a hit Wednesday as investors and consumer confidence acted out their fears about impending fiscal policy. In question is whether or not the Feds will cut interest rates.

Feds raised the interest rate in July, hoping to slow inflation and fight off a recession. While investors are hoping for a cut in interest rates, stronger-than-expected market performance makes the issue a lot more nuanced.

Boston Federal Reserve President Susan Collins has called for patience. Collins says more evidence is needed before making a decision about cutting interest rates. The Fed’s Beige Book report acknowledged that there are signs that wage growth and inflation may slow even more. This would be good news for the economy.

Most experts are aligned with Collins. Forecasts about whether the Feds will raise rates suggest there’s a 93 percent chance that rates will remain the same, at least in the short term.

Feds will make the determination about rates in less than three weeks. The next policy meeting of the Feds takes place September 19-20.