Wednesday 21 September 2022 10:29 PM Dow plunges 500 points in sharp selloff after Fed vowed more aggressive rate ... trends now
Wall Street's main indexes ended Wednesday's session sharply down, after a day of wild swings driven by the Federal Reserve's latest policy announcement.
The S&P 500 lost 1.7 percent, as did the Dow Jones Industrial Average, which plunged 522 points to 30,183, while the Nasdaq Composite fell 1.8 percent.
It followed Fed projections for future interest rate hikes that were higher than expected, and a warning from Chair Jerome Powell that it will be 'very challenging' to achieve a so-called 'soft landing' for the economy.
The Fed, which on Wednesday raised its policy rate to the highest level since the 2008 financial crisis, is trying to control rampant inflation by cooling the economy, but hopes to avoid a sharp downturn in a difficult balancing act.
The Dow Jones Industrial Average plunged 522 points Wednesday after a day of wild swings
Stock trader Peter Tuchman works on the floor of the New York Stock Exchange on Wednesday. Stocks dropped in the final hour of trading after the Fed announcement
The central bank's latest 0.75-point interest rate hike, the third in a row, takes the policy rate to a range of 3 percent to 3.25 percent, a move that was widely expected.
But the Fed policymakers projected future rate hikes at a sharper pace than expected, saying the key rate will likely hit 4.4 percent by the end of the year and 4.6 next year before coming back down.
Those forecasts up from projections in June of 3.4 percent and 3.8 percent respectively, and sent markets gyrating wildly in afternoon trading.
'Markets were already braced for some hawkishness, based on inflation reports and recent governor comments,' Yung-Yu Ma, chief investment strategist at BMO Wealth Management, told Reuters.
'But it's always interesting to see how the market reacts to the messaging. Hawkishness was to be expected,
