Major stock market indexes fell Friday on mounting fears of a slowing economy. Reports showed factory output in the eurozone fell at the fastest pace in six years, and U.S. manufacturing fell to its lowest level in two years.
U.S. bond yields fell, creating an inverted yield curve between the 10-year and 3-month Treasuries, the first time since 2017, a precursor to a recession. German 10-year bond yields fell below zero for the first time since 2016.
Bank stocks were hit hard after Wednesday’s FOMC decision because of the lower rates and softening world economy. The FOMC has put a lid on future rate hikes for now and, in fact, the fed-funds futures are pricing a 57% probability of a rate cut by next January.
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