Fed Continued To Raise Rates
What is it?
Last Wednesday the Fed raised the prime interest rate another 0.25%.*
“‘The Fed has raised interest rates at the fastest pace in 40 years and fallout is to be expected. Bank failures are one, but a broader economic slowdown or recession is likely the ultimate price to be paid to get inflation under control.’ says Greg McBride, CFA, Bankrate chief financial analyst.”
Why does it matter?
After the meeting, Federal reserve chair Jerome Powell made one important point. He mentioned they do not plan on increasing interest rates more, but may still do so depending on incoming data. Last month they came into May with the intention of continuing to raise interest rates. That change in the language used to discuss the next meeting was enough to keep investors from selling off stocks.
With that said, another bank suffered not long after. Other banks suffered as a result and fear crept back into the markets last week with more down days than up.
Apple Saved the Day
What is it?
The week in stocks wasn’t great but Apple’s earnings helped to boost investor confidence on Friday.
“Apple Inc. rallied Friday after an iPhone rebound helped quarterly earnings beat estimates, even as overall sales at the world’s most valuable company remain in decline.”**
Why does it matter?
While the iPhone did well, almost all other products did worse than expected last quarter. The strong U.S. Dollar hurt profits from international sales. This is important for other companies as much as it is for Apple. If Apple is having a hard time in some areas, then smaller companies may have to weather the economic storm or find ways to innovate.
Other articles we found interesting this week:
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*James Royal. “Biggest winners and losers from the Fed’s interest rate hike”. 5/3/2023. Bankrate. https://www.bankrate.com/banking/federal-reserve/fed-interest-rate-decision-biggest-winners/
**Mark Gurman. “Apple Buoys Wall Street, Keeping Doubts on Future Growth at Bay”. 5/5/2023. Yahoo Finance. https://finance.yahoo.com/news/apple-iphone-bounces-back-helping-224910213.html
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