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As Treasury Yields Hit Multiyear Highs, The Dow Continues To Decline And Drops 100 Points

Stocks declined on Thursday, compounding losses for the week, as investors reacted negatively to the Federal Reserve’s decision to maintain interest rates at their current levels for an extended period of time.

The most recent driver of this increase was the weekly jobless claims report, which demonstrated a continuing robust labour market and may have encouraged the Fed to continue its rate hike programme. The 10-year Treasury yield reached 4.48%, its highest level in more than 15 years. In contrast to the 225,000 claims predicted by analysts surveyed by Dow Jones, weekly unemployment claims declined by 20,000 to 201,000 for the week ending September 16. The number of new unemployment claims fell to its lowest level since January.

Following the release of the jobs report on Thursday, the 2-year yield reached a high of 5.19%, matching 2007 highs.

After the Federal Reserve announced it will maintain interest rates but predicted another rate hike before the end of the year, the three major averages closed at session lows on Wednesday. The central bank also signalled fewer rate reductions for the coming year, effectively stating that persistent inflation would require higher rates for a longer period of time.

A soft landing for the economy was still conceivable, but it wasn’t the Fed Chair Jerome Powell’s base case, he said in a statement following the judgement.

Source (CNBC)

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