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Raised interest rates sharply under the background of high inflation, the fed is expected to heat up, temporary Powell, chairman of the federal reserve said 21, will be in 5 month for a meeting to consider raising interest rates 50 basis points, which strengthened the market's expectations of rapid tightening monetary policy, markets expect the federal reserve will be in June and July meeting to raise interest rates 50 basis points, respectively.

Dow plunges nearly 1,000 points as Fed raises interest rates sharply

In the context of high inflation, the Federal Reserve sharply raising interest rates is expected to heat up, resulting in the two days of consecutive losses in the US stock market. Especially on Friday, all three major U.S. stock indexes fell more than 2.5%. Among them, the Dow plunged nearly 1,000 points, its biggest one-day drop since late October 2020. At the close of trading, the Dow was down 981.36 points, or 2.82%, at 33811.40. The S&P 500 fell 2.77%; The Nasdaq fell 2.55%.

On The news, the Federal Reserve Interim Chairman Jerome Powell said on The 21st, in the context of high inflation and loose monetary policy environment, will consider raising interest rates by 50 basis points at the May meeting, and said that similar interest rate hikes may be needed later. This reinforced market expectations of a rapid tightening of monetary policy, with the Fed expected to raise rates by 50 basis points each at its June and July meetings.

Treasury yields extended their rally on Friday, with the 10-year yield rising as high as 2.94% on the day, a 3-1/2 year high. The yield on the five-year note rose to 3.05% and the yield on the two-year note rose to 2.76%, both the highest in 3 1/2 years.

Janet Galetti, chief economist at Robertson Stephens Wealth Management, said that while Powell's hawkish comments were the main reason for the drop, pessimism was also reflected in cautious statements from some companies about future sales growth.

Following Netflix's 35.12 percent drop on Wednesday due to a rare drop in subscribers, Shares of Columbia Medical Products inc. and Gap Inc. plunged 21.82 percent and 17.98 percent, respectively, on Friday due to negative earnings, weighing on related sectors and market sentiment.

An NBC news poll last month found that 38 percent of Americans surveyed blamed the administration's economic policies for the worst inflation in 40 years. The epidemic followed (28%) and companies raised prices (23%). Only 6% blamed the conflict between Russia and Ukraine for inflation.

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