US Powell's 'Hawkish' Remarks Trigger Broad Decline in New York Stock Market

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The New York stock market, which had been strong even after the U.S. central bank, the Federal Reserve (Fed), hinted at a rate hike in March on the 26th (local time), collectively turned to a decline during Chairman Jerome Powell's press conference.

As of 3:18 PM Eastern Time, the Dow Jones Industrial Average was trading at 33,992.33, down 0.89% from the previous close. The S&P 500 index fell 0.82% to 4,320.86, and the Nasdaq index dropped 0.66% to 13,449.76.

The New York stock market had been closely watching the Federal Open Market Committee (FOMC) regular meeting held over two days until this day. Shortly after the statement hinting at a rate hike in March was released around 2 PM, the Dow Jones surged more than 200 points, and all three major indices showed strength. However, from 2:30 PM, as Chairman Powell's press conference began, the New York stock market turned bearish.

Chairman Powell mentioned in the press conference that "there is considerable room to raise interest rates."

Meanwhile, the Fed announced after the FOMC regular meeting that it decided to keep the benchmark interest rate unchanged at the current level (0.00~0.25%).

The FOMC stated, "Inflation is well above the 2% target, and the labor market is strong, so it is appropriate to raise the target range for the interest rate soon." Although no specific timing was mentioned, a hike is likely at the March FOMC meeting when tapering ends. This would be the first hike since December 2018.

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