we are in this for as long as it takes to get inflation down says feds brainard us stocks finished sharply higher on wednesday with all three benchmarks posting their best day of gains in about a month as investors assessed remarks by federal reserve vice chair lael brainard and other fed officials while digesting the central banks latest compilation of economic anecdotes on tuesday the nasdaq composite dropped 07 logging its seventh straight daily decline and marking its longest losing streak since 2016 the dow jones fell 173 points or 06 while the sp 500 declined 04 brainard the no 2 official at the central bank said on wednesday that the fed will need to raise the policy rate further and keep rates at high levels for some time to provide confidence that inflation is moving down to target we are in this for as long as it takes to get inflation down brainard said in a speech at a conference hosted by the clearing house and bank policy institute stockmarket investors took the comments in stride with major indexes ticking up to new session highs following brainards remarks stocks shook off a premarket wobble seen after a report published by the wall street journal said federal reserve chairman jerome powells commitment to reducing inflation even if it increases unemployment appeared to put the central bank on track to hike interest rates by 075 percentage point rather than half of a percentage point when policy makers meet later this month traders had already largely priced in a 75 basis point move fedfunds futures traders priced in an 76 chance of a 75 basis point move following the report up from 73 on tuesday according to the cme fedwatch tool i still think they do 75 basis points just because the market is largely price smart they take it and they see what happens but to me at least inflation is set to roll over and possibly pretty hard said brent schutte chief investment officer at northwestern mutual wealth management my worry is that the federal reserve thinks they have to keep hiking longer than what they really need to because i do think it is starting to wear off the feds beige book survey showed the us grew slightly through end the august but the outlook for the economy over the next year remained generally weak because of rising interest rates and nagging labor and supply shortages the report is published eight times each year before the federal open market committee meetings and helps the fed make key decisions about the economy according to the report substantial price increases were reported across all districts particularly for food rent utilities and hospitality services meanwhile employment rose at a modest to moderate pace in most districts overall labor market conditions remained tight although nearly all districts highlighted some improvement in labor availability seewhy the stock markets june lows need to be back in the conversation according to one technical analyst stocks have retreated well off their midaugust highs as a summer bounce was brought to an end as federal reserve officials signaled they were unlikely to pivot away from higher interest rates in 2023 todays bounce in isolation might seem strange said keith buchanan portfolio manager at globalt investments but context also matters he said particularly with the markets sharp reversal in the past two weeks as more investors abandoned the idea of the fed backing off its inflation fight i dont necessarily think that this is the markets looking through or doubting the federal reserves conviction he said in an interview a sharp surge in treasury yields pressured stocks on tuesday the benchmark 10year yield rose 15 basis points the largest oneday climb in a month yields pulled back wednesday with the 10year rate down 86 basis points to 3264 the us dollar hit a new 20year high on wednesday just shy of the 111 level seeus stocks rise 15 on average one year after midterms analysts find thats as investors assess the latest data on the us economy as well as the efforts by european governments to mitigate the impact of surging energy prices the us trade deficit fell 126 in july to a ninemonth low of 706 billion adding to mounting evidence confirming the us did not fall into a recession in the first half of 2022 in the final week before fed officials enter a blackout period ahead of their sept 2021 policy meeting investors were parsing speeches for more clues on future interest rate hikes cleveland fed president loretta mester said wednesday that the economy will experience slow economic growth this year and next but she did not discuss whether she favored another 075 percentage point rate hike at the meeting or slowing down to a halfpercentage point increase powell will participate in a moderated discussion on thursday and fed gov christopher waller is due to speak on friday the bank of canada lifted its overnight target rate by threequarter percentage points to 325 following a surprise increase of a full percentage point in july the european central bank could lift rates as much as 75 basis points on thursday