Fed Hawkish Pivot Equity Risk

"The broad S&P 500 stock index dropped 1.2% Wednesday. Financial markets see-sawed, then fell Wednesday after the statement and news conference."

"Ironically, Warsh's decision to drop forward guidance may empower the other 18 members of the Fed's rate-setting committee. Those officials frequently give public speeches, and their remarks will get even more attention as financial markets seek clues about what the Fed may do next."

"Gillum warns that less Fed intervention will result in heightened volatility. He predicts that equity and credit markets could face 'sharper repricing around data releases' as investors adjust to fewer explicit policy commitments."

"Hawkish comments today from Richmond Fed President Tom Barkin were bearish for stocks when he said recent and expected data reflect 'a couple months of relatively high inflation,' which 'certainly puts pause to any conclusion that we're done fighting this.'"

"The ongoing discussion over Fed leadership, including potential replacements for Chair Jerome Powell, adds further attention on central bank policy."

"This is a change from rest of the year, when there appeared to be little relationship between the price of oil and the broad stock market."

"The Fed is forced to make the hawkish turn, removing the assumed Fed put, and killing the soft-landing hopes."

"A hawkish tilt by the Fed in its policy meeting that concludes on Wednesday could further pressure the high-flying shares."

"Powell said growth had slowed 'substantially' in Q4 and GDP projections for 2024 were revised slightly lower to 1.4%."

""The market is expecting the Fed to continue its hawkish rhetoric on rates," said Peter Cardillo, chief market economist at Spartan Capital Securities."