Updated: Sep 22, 2022
The Federal Reserve raised rates by 50 basis points on 5/4/2022, as was widely expected. But it was Chairman Jerome Powell’s comments that sparked a sharp rally in stocks. Powell said that the Fed wasn’t considering raising rates by 75 basis points.
“The market is applauding Chairman Powell’s comments that the economy remains strong thanks to solid corporate balance sheets and still cash-rich consumers,: said Quincy Krosby, chief equity strategist at LPL Financial. “Moreover, he suggested that perhaps the worst of the sharp move in inflationary pressures may be poised to ease.”