Wall Street Reacts as Fed Chair Powell Signals Patience on Rate Cuts

Wall Street faced a downturn following remarks by Federal Reserve Chair Jerome Powell, who indicated no urgency for interest-rate cuts. His comments boosted bond yields and pressured equities sensitive to rate changes. Traders now foresee little easing by 2025, and all major U.S. stock indexes registered weekly losses.

Wall Street braced for a downward shift on Friday, as Federal Reserve Chair Jerome Powell's comments dampened hopes for imminent interest-rate cuts. After Powell announced that there's no hurry to adjust rates, bond yields climbed, creating strain on rate-sensitive stocks.

Powell emphasized economic growth, a strong job market, and inflation persisting above desired levels as factors allowing the Fed to proceed cautiously with future rate decisions. Following his speech, U.S. Treasury yields rose, and the major stock indexes ended lower.

Market participants responded to Powell's remarks by increasing their bets that the Fed will hold rates steady in December, with predictive data signaling just 71 basis points of total rate easing by the end of 2025. October it sales beat expectations, adding complexity to inflation and economic outlook deliberations.

(With inputs from agencies.)