FULL SHOW 03/17/2021: Investors focused on the Federal Reserve

New York (CNN Business)Wall Street stumbled Thursday morning with tech stocks selling off, all three major stock indexes opening in the red and the 10-year Treasury bond yield climbing to a new 13-month high.

Just a day after Federal Reserve Chairman Jerome Powell appeased the market, all bets are off again.
The Dow (INDU) opened 0.1%, or 45 points, lower after ending above the 33,000 point mark Wednesday for the first time in history. The broader S&P 500 (SPX) opened down 0.6%. The more tech-focused Nasdaq Composite (COMP) fell 1.3%. Meanwhile, the 10-year Treasury yield reached a new 13-month high, climbing 0.1% to 1.74% around the time the market opened.

Powell didn’t appear concerned about the recent ascent in bond yields, and he said the central bank isn’t ready to pull the plug on its bond-buying program, thereby avoiding a situation like the 2013 “taper tantrum,” when investors got scared about the end of the last easy-money era.

Powell also reiterated that any heightened inflation over the summer will be temporary. The Fed’s consensus outlook showed only four officials expecting an interest rate increase in 2022, with most officials only forecasting a hike in the year after.

Although all that soothed the inflation-worried market on Wednesday, “inflation fears have crept in again,” said BMO economist Priscilla Thiagamoorthy, explaining the yield move in a note to clients. “All this, after Fed Chair Powell seemingly diffused market angst on Wednesday, reinforcing that the central bank remains nowhere near tapering.”
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