The Fed held rates steady at 5.25% to 5.5%. In the Fed statement, the committee said that it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.”
Nasdaq swiftly fell by 2.23%, the Dow eased by -0.82%, S&P 500 down 1.61%, and Russell 2000 lost 2.44%. The FOMC weighed its decision heavily on employment, CPI, and core CPI. However, people want to know the inflation rate, which includes food and energy. This is the most important data point for consumers.
Stocks that risk falling on profit pressures include Coca-Cola (KO), Pepsi (PEP), and conglomerates like Johnson & Johnson (JNJ). Mondelez (MDLZ), a snack provider, issued weak guidance that warns investors of pressures ahead.
Watch out for media pivoting away from the March rate cut cancellation and to the May 2024 rate cut. Regional banks are under the greatest pressure from high rates. New York Community Bancorp (NYCB) lost 37.67% on Jan. 31. It posted Q4 earnings per share losses. It added to its reserves and slashed its dividend from 17 cents to 5 cents a share. Its assets now exceed $100 billion after it acquired Signature Bank. Worryingly, NYCB took a $552 million provision for loan losses.
