(News Bulletin 247) – The New York Stock Exchange is expected to open in disorder on Thursday morning the day after a session of heavy decline linked to the Fed’s decision to raise its rates for the fifth time in as many meetings.

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Half an hour before the opening, the ‘futures’ contracts on the major New York indices are moving close to equilibrium, or even up very slightly, signaling a rather cautious opening after the decline the day before.

As expected, the Federal Reserve announced yesterday that it had again raised its key rates by 75 basis points, now raised between 3% and 3.25%, and reaffirmed that it expects additional increases.

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Investors did not particularly appreciate these statements, as evidenced by the significant losses signed yesterday, the Dow Jones having ended up giving up 1.7% and the Nasdaq having lost nearly 1.8%.

Wall Street quickly lost ground when the central bank’s projections showed interest rates around 4.5% next year, a much more restrictive posture than investors expected.

Market players have especially noted that Jerome Powell, the chairman of the Fed, was still as determined to continue monetary tightening as long as growth had not calmed down and labor market tensions had not eased.

These remarks imply an even more marked correction in real estate, a strong brake on growth, or even an entry into recession, as well as a rise in the unemployment rate, warn the analysts from the outset.

So many factors that are not conducive to the equity markets, while the S&P 500 index has already fallen by more than 20% since the start of the year, which makes it at this stage its worst year since 2008.

According to Goldman Sachs calculations, a rise in the unemployment rate towards the 5% to 6% zone (against 3.7% today) would imply a fall in the S&P towards 2900-3375 points, i.e. an additional fall of 11% to 23% from current levels.

The increase in weekly jobless claims, although a little less strong than expected, confirmed this morning the scenario of a lull in the labor market under the effect of the action of the Fed.

As for rates, the sell-offs observed on the stock market and the accumulation of fears of seeing growth slow down in no way curb the rise in bond yields.

The 10-year loan is again tending towards 3.56%, not far from the multi-year peak of 3.60% established at the start of the week.

After reacting upwards to the latest announcements from the Federal Reserve last night, the dollar is stabilizing around 0.9870 against the euro.

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