Conflicts and Losses | Weekly Excerpt October 3

Cleveland Fed President Loretta Mester echoed the tone her colleagues reaffirmed this week when she said the Fed is still to come from more rate hike pain. The Fed's decision to remain proactive was made possible by Thursday's better-than-expected personal consumption and 2Q core PCE statistics. Weekly jobless claims declined to their lowest level since April, indicating a continued tight labor market.

Shawn Snyder, chief investment strategist at Citi US Wealth Management, said the market is now accepting that a recession is almost inevitable at this stage and is adjusting accordingly.

Another group of Fed policymakers took a hawkish stance, causing U.S. stocks to fall to their lowest level since November 2020, while market jitters in Europe worsened further.

During Thursday's session, the S&P 500 fell as low as -2.9%, though it later trimmed its losses. An ill-timed attempt on Wednesday to recover from a six-day slide was stifled by its bearish rally.

The Nasdaq fell more than 4% during the session after St. Louis Fed President James Bullard stated that investors now understand that they cannot avoid further rate hikes in the coming months. Apple Inc. was the main factor in the index's decline; the company fell as much as -6.1% in response to a downgrade from a Bank of America analyst who forecasts a decline in customer demand for its popular devices.