Lower employment numbers and higher inflation worsen economists’ view
A negative employment report for February amid the escalating conflict with Iran has added to the already worrying outlook for the US economy.
Stocks fell after the US Federal Reserve ended its two-day policy meeting on March 18 without changing interest rates, citing uncertainty from the Iran war and concerns about inflation.
The Dow and S&P 500 fell 1.6% and 1.4%, respectively, to their lowest since November. The tech-heavy Nasdaq fell 1.5%.
Bonds fell, with the 10-year U.S. Treasury note up nearly 6 basis points to about 4.26%. Bond yields and prices are moving in opposite directions, with investors selling bonds as inflation heats up. The overall price inflation rate announced this morning was higher than analysts expected.
Meanwhile, oil and gas prices remain high. As of Wall Street’s close for the day, Brent crude oil was trading around $105 a barrel, up nearly 6%, and the national average for a gallon of gasoline is now $3.86, according to tracking by GasBuddy.
Fed Chairman Jerome Powell highlighted the uncertainty caused by the Iran war as the main reason the Fed is keeping interest rates steady.
On Wednesday, Wall Street’s “fear gauge” VIX composite index soared nearly 10%.
