The Federal Reserve and the stock market are butting heads over the central bank’s efforts to fight inflation.
Stocks capped a steep two-day sell-off on Friday, wiping out gains from a rally earlier in the week driven by hopeful economic news. Inflation as measured by the consumer price index had fallen for the fifth straight month — and far more than analysts expected — according to data released right before the Fed was set to slow down its interest rate hikes.
While the Fed did end up boosting rates by a smaller amount than its previous four hikes, a dour forecast from officials, including Chairman Jerome Powell, shook markets out of their optimism. Instead of signs of lower interest rates ahead, the Fed warned rates would be even higher and stay that way for longer.
The Dow Jones Industrial Average closed down 281 points Friday, falling 0.9 percent on the…
