Published September 29, 2023
The stock market has been experiencing a pullback as investors adjust to a “higher for longer” interest rate outlook. That change in outlook came from the Federal Reserve’s recent meeting as shown below in the “dot plot” projection by the Fed members. The dots represent each Fed member’s outlook for interest rates over the coming year. Investors look at the median of those projections for an indication of what the Fed members see on the horizon. The stronger-than-expected economy has driven a push upward in those projections from the Fed’s June meeting. And it was a significant push upward – a full +0.5% from 4.6% to 5.1%. Stocks have reacted poorly to the change in projections, dropping -5%.
