Here's why the Dow is dropping
by James Langford | Feb 5, 2018, 5:30 PM
Payroll growth of 200,000 during January, reported by the Bureau of Labor Statistics, outpaced economists’ projections of 175,000, while hourly earnings increased almost 3 percent. That boosted the likelihood the Federal Reserve will raise interest rates in March by five percentage points from the start of the week, based on futures trading tracked by CME Group.
The central bank has already signed off on five 25 basis-point hikes since late 2015 after keeping rates near zero for seven years following the 2008 financial crisis, and another increase of the same size would take them to a range of 1.5 percent to 1.75 percent.
While steady upticks benefit banks, which juice margins by passing on increases more quickly to borrowers than depositors, they can be ominous for consumers with adjustable credit card rates and companies with low credit scores and high debt loads.
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