Happy Friday eve, readers. The Fed made its long-awaited policy move on Wednesday. Below, you'll find everything you want to know — including everything that it impacts and what's going to get more expensive.
Let's jump in.
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1. The Fed's first interest rate hike of 2022 has arrived. Looking to combat historic inflation, the Federal Reserve raised its benchmark rate by 0.25 percentage points on Wednesday, matching most expectations.
It is a long-awaited move and one that brings an end to an unprecedented era of easy-money policies that kept the economy afloat and stock markets riding high through the pandemic.
"The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run," the Fed said in its statement.
Rates offered by lenders are directly influenced by the Fed's benchmark rate, and when the central bank hikes, borrowing costs climb for everything from car loans, credit card payments, and mortgages. While higher borrowing costs impact consumers, the rate increase is also meant to provide some relief by taming inflation that's been running at the highest level since 1982.
But the rate hike doesn't mean the stock market can't climb higher, according to LPL Financial. History suggests indexes may be set to jump, and the firm noted the S&P 500's gains during a run of 17 rate hikes from 2014 to 2016.
The broader economy, meanwhile, should be able to avoid stagflation, said a global market strategist at JPMorgan.
In other news:
2. Global shares are heading higher after the Fed's rate rise. With the event now in the rear-view mirror, investors are taking profit on some of their bullish bets and boosting things like commodities. Here is your morning update.
3. Earnings on deck: Accenture PLC, Heritage Global, and Canadian Solar Inc, all reporting.
4. Goldman Sachs warned the ongoing Ukraine crisis could trigger a global economic downturn. The bank's analysts broke down the three sectors that could be hardest hit by wartime supply shocks over the next few months — and what might lead to a possible recession.
5. Energy traders are begging central banks for emergency cash to prop up commodities markets. A group that includes BP, Shell, and ExxonMobil sent a letter to central banks asking for liquidity amid a worsening crisis in the energy market. The help, the traders said, would allow them to better maintain an orderly market.
6. Mike Novogratz said bitcoin won't have a massive rally as the Fed hikes rates and war rages on in Ukraine. The long-time crypto bull said the current landscape may cause investors to re-evaluate riskier assets such as bitcoin. "Bitcoin is a narrative story, it's bringing people into the community. It's hard to bring in new people when their house is on fire."
7. Stock-buying fatigue among retail investors is the worst since 2020 — and it won't turn around anytime soon, Vanda said. The longer this year's market slump continues, said analysts, the more retail traders will tire. On Tuesday, retail traders had their weakest day of stock buying since Joe Biden's election rally.
8. There is some debate over the upside potential of Amazon's 20-for-1 stock split. Some commentators say that it's possible the move is just smoke and mirrors by the world's fifth largest company. Three experts weighed in on the implications of the e-commerce giant's stock split.
9. Confidence in the economy is eroding and fund managers are hoarding cash at a rate not seen since April 2020. But Bank of America said that professionals are still putting money into a specific three sectors. Here are 10 charts that paint a picture of what's going on right now.
10. Retail and restaurant sales hit an all-time high in February. Americans went back to shopping after the winter Omicron wave, and spending rose 0.3% as inflation intensified last month. The numbers, though, marked a significant slowdown from January's 4.9% leap.
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Curated by Phil Rosen in New York. (Feedback or tips? Email [email protected] or tweet @philrosenn.)