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Stocks slip following Fed-induced sell-off

Yahoo Finance's Jared Blikre breaks down how stocks are moving after the Fed's interest rate hike on Wednesday.

Video transcript


AKIKO FUJITA: All this market action following yesterday's decision by the Fed to hike interest rates by 75-basis points. But the Federal Reserve not the only central bank moving in the direction of fighting global inflation. Let's bring in Yahoo Finance's Jared Blikre, who's tracking the very latest. We got a long list of central banks to get to.

JARED BLIKRE: Oh, I don't know if we have time. We're gonna start with the Fed because this happened yesterday. And of course, most people watching have a vested interest in what's going on in the US markets. Some negative price action once again.

I will say this, following Powell's presser yesterday, really interesting to see the close, which was a selloff into the close. In fact, it started during his presser. And this is a marked departure from what we saw at the last press conference.

In fact, we heard from Fed officials who said, the rally that we saw in late July after that presser, that was not the desired effect. So in fact, the fact that stocks are down yesterday and today is actually what the Fed wants. Let that sink in. So NASDAQ down about 3% over the trailing two days.

I want to take a look at the bond market. Akiko, you were just telling me the two year has careened north of 4%. Looking at the five year, that's just short of that. That is up 20-basis points today alone. That is a huge move in the belly of the curve. Also want to take a look at the 10 year. That is up at multiyear highs. I believe the highest since 2007.

Importantly, though, the very short end of the curve, the 13-week T-bill yield, this tracks what the Fed's benchmark is doing. This is actually down slightly, 3-basis points. In fact, it's been down two days in a row. So we haven't made new highs in the very short end of the curve.

But look at bond volatility. This is the ICE B-of-A MOVE index. This tracks volatility. And you can see in a range here but approaching the upper end. And you take that in conjunction with what we're seeing in equities with the VIX, that is creeping higher. Spiked to 30 yesterday. Might see-- might be in a round for another bout of selling here.