Wednesday's session in the US markets ended with a decline in major stock indices. Investors reacted to the statement of the chairman of the US Federal Reserve Jerome Powell, according to which inflation in this country is still too high, and therefore the central bank plans to take further actions to stabilize prices. The Dow Jones Industrial Average lost more than 500 points with the S&P 500 and Nasdaq down 2.5% and 3.4% respectively.
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At the conclusion of its two-day meeting, the Fed announced another interest rate hike by 75 basis points. The bankers explained that "they will take into account the cumulative tightening of monetary policy, the lags with which monetary policy begins to affect economic activity and inflation, and changes in the economy and finances."
Powell said the threshold for interest rate hikes had to be raised in response to sustained high inflation.
"We still have a few options, and the data since the last meeting suggest that the final level of interest rates will be higher than previously expected," the Fed chairman said on Wednesday. He added that at this stage the discussion on stopping the rate hikes was "premature".
The ADP employment report for October showed that the number of seats in the US private sector increased by 239,000, suggesting that the labor market remains strong despite interest rate hikes. Two days earlier, the official US employment report was issued by the Bureau of Labor Statistics (BLS).
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