The Fed is about to make its biggest decision of the year
Tech investors aren’t waiting around for Powell to tell us what we already know: The Fed is about to get serious about inflation.
Yet the rest of the market is waiting with bated breath.
The Dow is flat. The S&P 500 is down just 0.2%. The Nasdaq is down a little less than 1%.
Investors pretty much know what Fed Chair Jerome Powell is about to say: The Fed is walking a tightrope, trying to balance an economic recovery in peril with surging prices. Rising Covid cases aren’t helping. Neither is the supply chain crisis or a labor shortage.
Yet the Fed believes the economy still has plenty of juice left to squeeze, and it’s hinted very strongly that it will speed up its wind-down of pandemic-era emergency stimulus.
That’s not such great news for tech companies, which have relied on surging earnings growth to justify sky-high valuations. Higher rates could eat into profit, making value stocks more attractive.
