The Fed hiked rates for a 10th time in its fight against inflation.
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What you need to know today
- The Federal Reserve raised interest rates — having now hiked 10 times and by a total of 500 basis points — and dropped a tentative hint that its current tightening cycle is at an end. Read Fed Chair Powell's market-moving comments from after the move, and see what changed in the Fed's new statement.
- Stocks on Wall Street closed lower after the Fed's decision, losing earlier bullish sentiment as Powell ruled out the possibility of interest rate cuts, saying he doesn't expect inflation to come down quickly enough.
- Google employees aren't happy about CEO Sudar Pichai's hefty pay raise last year, which filings show swelled to $226 million, including stock awards. Workers criticized Pichai for not taking a pay cut while the company is slashing costs, which has included the elimination of 12,000 jobs.
- PRO Apple's quarterly results will be the market's next big test. JPMorgan breaks down whether the company will deliver.
The bottom line
Good morning from Singapore. The Fed's move was widely in line with expectations, but Jerome Powell was quick to dash hopes for rate cuts. Concerns linger over what comes next.
As Jeffrey Gundlach argued, the regional banking crisis won't come to an end until the central bank decides to bring rates down. The latest hike brings the fed funds rate to a target range of 5% to 5.25%, the highest it's been since August 2007.
But investors wondering what's next have clues to work with: Regional banks continued to plunge after the Fed move and on a report that PacWest Bancorp is weighing strategic options, including a potential sale. The bank's shares cratered nearly 60% in extended trading on Wednesday. Shares of Western Alliance Bancorp dropped 29%, while Comerica slid 13% and KeyCorp shares fell 11%.
Traders are feeling the burn, again, it seems — with veteran banking analyst Christopher McGratty describing the steep falls as a situation similar to March, when the failure of Silicon Valley Bank sparked a selloff in regional banks. The KBW head of U.S. bank research told CNBC that people are "trading stocks on fear and sentiment, and not fundamentals."
Asia markets are bracing for a grim session as well, though investors there will rely more on economic data than their U.S. counterparts are doing.
China's Caixin PMI will provide clues about where the economy's uneven reopening is headed next, after government data showed a rather disappointing picture over the weekend.
Meanwhile, South Korea's finance minister told CNBC that the country's relationship with Japan is at a "turning point," ready to leave behind the trade tensions that have flared between two major U.S. allies in the region.
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