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Federal Reserve hikes by another 25 basis points, as expected, softens guidance

May 03, 2023 2:00 PM ETBy: Liz Kiesche, SA News Editor281 Comments
Federal Reserve System logo close-up

Petr Vdovkin

The Federal Reserve on Wednesday pushed its policy rate up another 25 basis points to 5.00%-5.25%, as expected, in its mission to drive down inflation even as recent bank failures roiled markets.

The central bank's monetary policy committee said it

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Comments (281)

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Stop calling it Federal, there is nothing federal about private banks shafting poor and middle class people in USA.
Get the Fed back to a stable currency mission only, and cut their budget by 3/4. And btw, pushback on any move to eliminate the $US dollar and replace it with a government-controlled cryptocurrency.
great buying opportunity today, dont miss out. we still have another 20-30% up this year. yesterday was a great opportunity to buy but today is also. inflation is here to stay, which makes stock go up. its impossible for nasdaq to drop below 11000 again
Steve Kean profile picture
The European Central Bank also hiked by 25 basis points today. That comes after the Fed yesterday, and the surprise hike in Australia earlier this week.

Anyone still believing we are headed for rate cuts in 2023??

Those money market funds yielding 5% look pretty good to me…
Prices were coming down in grocery stores, supply chain issues were being resolved (like F running out of right hand door handles for the F-150 and F-150 EV). They just replaced them with temporary ones and they will install the doorhandles and ship out to customers ASAP.

All they had to do was a hawkish pause. You can't raise rates from 0% to 5.25% the fastest in history. The financial system can't handle that stress. They could have gone to 7% over a slower time frame and the economy wouldn't break. I may be younger but I know the Fed didn't lower/raise rates every quarter it was every other quarter. Nor did they have these stupid press conferences where we see that CHAT-GPT4 could do a better job answering questions the J Powell.

I am definitely glad I invested in Europe at the end of the year through IEUR and have 25% in $TLTW. iShares ETF that sells calls on its own ETF. Up 9.1% on the year with dividends.
Dale Roberts profile picture
"The banking system is sound."
@Dale Roberts sounds like a train wreck
mizesa profile picture
@Dale Roberts He is going to regret saying that. PACW dropped 50% after that statement.
@mizesa All these west coast banks... Wonder why?
AlphaMove profile picture
I would not blame the fed for all this mess. Investors and the people should blame only themselves because you voted for politicians, who have been printing trillions in free money to you.
The more money sloshing in the system, the higher interest rates have to be.
You wouldn’t have voted for anyone who is fiscally responsible and had plans to stop the irrational government spending and give-aways. So stop complaining and live with it.
@AlphaMove The Fed is to blame. Too far. Too fast. Inflation was transitory. Over reaction. They should all be fired and put in jail for causing financial distress and mayhem across the globe.
@AlphaMove absolutely! We can’t print $4.3 T in a panic while ordering 30% of the workforce at home and expect anything but rampant inflation.
@Phil Dumfee transient imply prices will return to normal. MI rarely paid over $300/week for groceries. Now it’s $400-$500 weekly, my airfares have doubled. Still waiting for the roses to stop.
they consolidate the banks thereby reducing the money supply.
And the 10-yr rate goes down.... Market living in fantasy world.
Growth-it-UP profile picture
Bring on a few more.
So many gullible bears on this thread. Do you really think the fed are going to broadcast a possible pause/pivot? You honestly think they will say ‘this is the last one, promise.’ Of course not. Even if the fed plan to pause or pivot anytime soon they will leave things deliberately vague and obfuscate till the last possible minute.

The market will obviously try to front run this as it is naturally forward looking - but the market is more likely to be right than a bunch of bears who still blindly believe the fed.
mizesa profile picture
@Thunderdemon Look at the huge gains made last year shorting ARKK and this year shorting KRE. Believing the Fed has been extremely profitable!
yieldhunter196 profile picture
@Thunderdemon this. Too many trolls in here
SuperPac profile picture
Reported - PacWest exploring potential sale....LOL
This baby is gone by the weekend...
Who's next
Illuminati Investments profile picture
@SuperPac $WAL, apparently.
looks like we will hit another all time high soon. start buying! once in a life time opportunity
Winnertakesall profile picture
Banks will stop lending... guess what comes next, Business fail and quick. We're already deep in a depression IMHO.
The Folks at the Fed don't know that optics matter. When businesses lose confidence in a bank it's game over. Banks will put credit and this results in immediate bankruptcy. Congrats Fed, you got what you wished for...
No cuts until something breaks. Why would they? They've reloaded their ammo, why fire it all away immediately ...
Illuminati Investments profile picture
@wboz Um, $PACW and $WAL are breaking AH.
Half of our banks are insolvent. Credit crunch will continue and I wouldn’t be surprised if another banks fails this month. The next FOMC meeting feels like it’s months away… that’s very bad for the markets and banks.
@Mo007 When banks are in trouble they raise interest rates and criteria. Very little evidence of this to date beyond pricing to much barrowing costs.
Another 25 in June....
SuperPac profile picture
After the Powell speech, the bottom dropped again.
PacWest down 3%
West All down 4%
Zion down 6%

Easy capital / liquidity days are over for good. Ain't coming back in any hurry. Look after your money.

I'm convinced, Powells a fool.
@SuperPac PacWest is down 23% after trading as of this post. It will be a interesting day for them tomorrow.
SuperPac profile picture
To the slaughter-bench.
1. Raised rates.
2. Decision was unanimous.
3. Might raise rates again.
4. No rate cuts this year.
5. Will not relent until inflation hits 2%.

Stocks are dangerously expensive.

Investors need to de-risk...quickly.
@Amos Tuck Cali...housing prices up, multiple bids, more traffic than ever with gas at $4.75, long lines at restaurants and burger drive thrus, very very far from a recession
@Amos Tuck AAPL dropping in AH. There are no more buyers unless they pull a rabbit out of a hat. AAPL now makes up 6% of the S&P500 or something. I’m already 25% in treasuries and I plan to increase that ammount.
superartus profile picture
@Wellington999 we're back to bidding wars on homes again in SoCal. Like you said restaurants are packed. Everyone has so much money here.
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