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Chaos on Wall Street Following the Latest Bidenflation Report

Stocks are tumbling and disappointment is shaking markets worldwide Tuesday, following Wall Street’s realization that inflation isn’t slowing as much as hoped.

The S&P 500 sank 2.3 percent in early trading Tuesday, threatening to snap a four-day winning streak. Bond prices also fell sharply, sending their yields higher, after a report showed inflation decelerated to 8.3 percent in August, instead of the 8.1 percent economists expected.

The disappointing data means traders are bracing for the Federal Reserve to ultimately raise rates even higher than expected to combat inflation, with all the risks for the economy that entails.

“Right now, it’s not the journey that’s a worry so much as the destination,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments. “If the Fed wants to hike and hold, the big question is at what level.”

The Dow Jones Industrial Average lost 603 points, or 1.9 percent, to 31,777, as of 9:45 a.m. Eastern time, and the Nasdaq composite dropped 3.1 percent.

Almost all of Wall Street came into the day thinking the Fed would hike its key short-term rate by a hefty three-quarters of a percentage point at its meeting next week. But the hope was that inflation was in the midst of quickly falling back to more normal levels after peaking in June at 9.1 percent.

The thinking was that such a slowdown would let the Fed downshift the size of its rate hikes through the end of this year and then potentially hold steady through the first half of 2023.

Tuesday’s less-than-anticipated improvement dashed some of those hopes. Many of the data points within the report were worse than economists expected, including those the Fed pays particular attention to, such as inflation outside of food and energy prices.

Markets honed in on a 0.6 percent rise in such prices during August from July, double what economists expected.

“This suggests that inflation expectations may be becoming ingrained,” said Gargi Chaudhuri, Head of iShares Investment Strategy.

The inflation report arrived before trading began on Wall Street, but it sent a thud through markets worldwide.

Treasury yields immediately leaped on expectations for a more aggressive Fed. The yield on the two-year Treasury, which tends to track expectations for Fed actions, leaped to 3.71 percent from 3.57 percent late Monday. The 10-year yield, which helps set where mortgages and rates for other loans are heading, rose to 3.42 percent from 3.36 percent.

Stock markets in Europe, meanwhile, veered from gains to losses. The German DAX was down 1.1 percent, and the French CAC 40 fell 1 percent.

READ 9 COMMENTS
  • Russ says:

    The idiot is destroying our country and the main stream media is totally complicit in it. The Biden family is a criminal enterprise and the FBI and DOJ are accessories to the crimes. Covering up the sexual perversion, selling access to our government leaders, hiding Hunters laptop and the crimes documented on it and disregarding our constitution to unlawfully incarcerate protesters without bail or speedy trials is wrong . The selective enforcement against conservatives is discriminatory. Is there no one in our government that can see how wrong all this is

    • Louis Galmarini says:

      There are 89 million Americans who own guns. I’m sure (at least) ONE of them is going to say, ‘enough is enough’, and put a bullet into every fucking person in this current ILLEGITIMATE ‘Administration’. FIND THEM. KILL THEM. DONE!

  • John says:

    Sounds like it’s time to shut down Wall Street and steal back the money that was stolen from millions of defrauded investors by political insider trading scumbags, and government insider trading scumbags who manipulate the economy for their own benefit,

    • Art LaPella says:

      Oh, hell no! The money will come from investors, large and small, not from insider traders, and much of the loot will go to whoever manages the robbery, not to the investors. Investors would avoid the U.S. for decades to come. Worse than the Depression.

      If we know who the government insider traders are, we should prosecute them. If we don’t, Robin Hood isn’t going to find them.

      • GreatGrandpa says:

        The insider traders can no longer hide. We, the people know, who they are, 99.
        9 percent of Congress, and the Whole Global Cabal. Just pull way back, look at the big picture, do the research. It’ll red pill you for sure! NCSWIC, WWG1WGA, P.A.N.I.C. LGB,FJB AND ALL SATAN’S DEMON SPAWN MINIONS DESERVE DIRT NAPS.

  • Art LaPella says:

    The Dow Jones Industrial Average was down over twice that amount for the entire day.

  • Richard Mundy says:

    There’s a sure fire way to end this? And that is too remove this idiotic Administration an install a Conservative president and end all what Biden did and this country would be back running this county in 60day’s or less just maybe if a hundred million people showed up at 1600 Pennsylvania Ave. we can end this crap?

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