Nov 28, 2018 - Economy & Business

What they're saying: Wall Street may be overreacting to Fed chair's speech

NEW YORK, NEW YORK - NOVEMBER 28: Federal Reserve Chairman Jerome Powell speaks at the Economic Club of New York on November 28, 2018 in New York City.

Fed Chair Jerome Powell speaks at the Economic Club of New York on Wednesday in New York City. Photo: Spencer Platt via Getty Images

The Dow Jones Industrial Average closed up 618 points on Wednesday, its best one-day gain since March (per CNBC), while both the S&P 500 and the Nasdaq Composite rose over 2% following a highly anticipated speech by Federal Reserve Chairman Jerome Powell in New York.

The big picture: There's no single reason for markets' surge, but some market-watchers say investors misinterpreted Powell's comment that interest rates were "just below" the neutral level to mean fewer interest rate hikes were on the horizon.

What they're saying:

  • Jared Bernstein, who served as chief economist under Vice President Joe Biden:
  • Ian Shepherdson, chief economist at Pantheon Macroeconomics:
  • Marc Chandler, chief market strategist at Bannockburn Global:
  • Gregory Daco, chief U.S. economist at Oxford Economics, tweeted, in part that it was "not correct" that markets saw Powell's comments has a signal that the Fed will no longer hike interest rates after December.

The other side:

  • Joe LaVorgna, chief economist for the Americas at Natixis:
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