Federal Reserve Chairman Jerome Powell opens the door to bigger interest rate hikes and a higher peak for rates.
U.S. stocks and other financial markets were jolted Tuesday as Federal Reserve Chair Jerome Powell made clear interest rates would rise further than policy makers previously expected, and opened the door wide open to speeding up rate hikes if the data warrants it.
“Jay Powell pulled no punches when it came to the Fed’s first priority to get inflation under control, and to go as far and as fast with rates as those numbers required,” said Danni Hewson, head of financial analysis at U.K. broker AJ Bell, in emailed comments.Gold slumped in response to rising yields and a stronger dollar. And equities dropped, with the Dow Jones Industrial Average DJIA slumping more than 500 points, or 1.6%, while the S&P 500 SPX slid 1.
When it comes to major data releases, the February jobs report is set for Friday. Economists surveyed by The Wall Street Journal, on average, look for the economy to have added 225,000 jobs, slowing from a blowout 517,000 increase in January that helped set in motion a market repricing of rate-hike expectations.
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