Jerome Powell has had the misfortune to become Federal Reserve chairman in the rocky market year of 2018, which has treated us to two corrections (at least a 10% fall from a peak).
So on Fed Day, when the central bank’s policymaking committee meets, the market has gone down seven times since Powell took over, according to Bespoke Investment Group. This “is a streak that began when Powell became chair,” the research firm wrote in a note. “That’s not a great track record so far.”
On Wednesday, when Powell’s news conference began, the S&P 500, which had been up, began to sink. It finished the day down 1.54%. As expected, there were no surprises out of the Fed, which increased short-term rates by a quarter-point for the fourth time this year.
Word was that Wall Street wasn’t convinced that the Fed’s rate-hike campaign was drawing to a close. The Fed’s policymakers indicated that they expected just two increases next year, which would mark a slowdown, although not necessarily an end to the boosts.
In fairness, Fed Days have been bad for the market before Powell came along. By Bespoke’s reckoning, Wednesday’s slide was the 19th time the index has dropped on a Fed Day. The latest was the worst since September 21, 2011, the firm indicated.