Last week’s economic data indicated that the economy is thriving with a robust jobs report and continued wage growth. Following this report, the market is fueled by tighter rate hike fears and expects that the Fed could lift its target interest rate above the projected 5.1% peak.
On account of moderating inflation, the central bank hiked rates by 0.25 percentage points. However, signaling further rate hikes, Fed Chair Jerome Powell expressed cautious optimism, “We’re going to be cautious about declaring victory and sending signals that we think the game is won, because we’ve got a long way to go.”
The Fed’s hawkish stance to curb inflation is likely to continue throughout 2023, which could keep the stock market under some pressure.
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