Stocks tumbled Wednesday after Federal Reserve Chair Jerome Powell said inflation was still too high and indicated that the central bank has more rate hiking ahead.
The Dow Jones Industrial Average slid 505.44 points, or 1.55%, to settle at 32,147.76. The S&P 500 dropped 2.5% to close at 3,759.69, while the Nasdaq Composite dove 3.36% to finish at 10,524.80.
The Fed implemented another 0.75 percentage point rate increase Wednesday afternoon, and Powell said in a press conference that its inflation fight was far from done.
“We still have some ways to go and incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected,” he said.
Powell added that it was “premature” to talk about pausing hikes.
“We have a ways to go,” said the central bank chair.
Stocks initially rallied following the rate hike when the Fed’s accompanying statement hinted at a possible policy change in the future. “In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” the statement read.
But traders’ hopes were dashed by Powell’s still-tough talk on inflation.
“The tone of Fed Chair Jay Powell’s comments was quite hawkish, which means the Fed still has a way to go to fight inflation, and the level of interest rates will be higher than…
