The Federal Reserve increase in federal funds rate by 0.755% sent the Dow Jones down over 500 points.
Officials at the central bank announced a rate increase of 0.75% in June and July.
The Federal Reserve cited high employment figures as a reason behind the rate rise. However, Kace Capital Advisors CEO Kenny Polcari said that joblessness could experience significant increases under aggressive monetary stimulus.
Many top companies across multiple industries have announced layoffs, including Meta and Bed Bath & Beyond. It will begin the week of 10 October,” Polcari stated.
Following the lockdown-induced recession, the Federal Reserve set a target interest rate of near zero to stimulate the economy. The Federal Reserve then purchased government bonds from the market. This was to stimulate the economy following the lockdown-induced recession. This is slightly lower than July’s 8.5% rise and June’s 9.1% rise.