The US Federal Reserve now expects to raise interest rates in 2023 as the post-pandemic economy thrives and inflation rises. That’s faster than it showed in March, when the Fed predicted rates would stay close to zero for at least the next two years, reports cnn.
And officials have begun arguing over when to reinstate the Fed’s big asset-buying program, which has amassed $ 120 billion a month in securities to keep borrowing costs low.
The change was immediately felt in all markets, which have been “intoxicated” by the stimulus measures of the crisis era for more than a year, reports Telegrafi.
Following the announcement, the Dow fell more than 380 points, or 1.1 percent, and the S&P 500 and Nasdaq Composite both fell 1 percent and 1.2 percent, respectively.
The bond market also experienced an increase, which reached figures of about 0.1 percent. Real yields, which refer to what borrowers pay when inflation is factored in, marked an even greater increase.
The US dollar in recent trading was at its highest level in more than two months against a basket of other major currencies. In Europe, the STOXX 600 index fell for the first time on Thursday as government bond yields rose.
