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Stocks Stumble Ahead of Key Fed Decision
The S&P 500 fell today as investors await the news about a key monetary policy decision from the Federal Reserve.
Since the latest stimulus package was passed, the federal reserve has yet to issue an update on the economy.
The $1.9 trillion stimulus package was a lot bigger than expected so many are anticipating a sign that the economic recovery is picking up.
However many investors are still waiting for further approval from the Feds to become optimistic about the growth.
USA Today stated, “Some economists expected the Fed policymakers to stick to their December estimate of no rate increases through 2023 while others reckoned the brighter outlook would all but force the officials to move up their projected timeframe to show they’re ready to stave off a potential spike in inflation.”
This rise of inflation has investors hesitating this last month since it may prompt a quicker than expected tightening of monetary policy.
According to the New York Times, The fed slashed its policy interest rate which guides borrowing costs through the economy in March 2020.
They recently announced they are continuing to keep it near zero, in an effort to keep credit cheap and continue stoking growth.