U.S. stocks fall as Fed signals it will remain aggressive

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Stocks fell broadly on Wall Street following the latest signal from the Federal Reserve that interest rates will need to go higher than previously expected in order to tame inflation

and Swiss National Bank each raising their main lending rate by a half-point Thursday. European stocks fell sharply, with Germany's DAX dropping 3.3%.signaled it expects rates to be higher

over the coming few years than it had previously anticipated. That disappointed investors who hoped recent signs that inflation is easing somewhat would persuade the Fed to take some pressure off the brakes it's applying to the U.S. economy. The federal funds rate stands at a range of 4.25% to 4.5%, the highest level in 15 years. Fed policymakers forecast that the central bank’s rate will reach a range of 5% to 5.25% by the end of 2023.

The yield on the two-year Treasury, which closely tracks expectations for Fed moves, rose to 4.24% from 4.21% late Wednesday.at the same time that pockets of the economy, including employment and consumer spending, remain strong. That has made it more difficult to rein in high prices on everything from food to clothing.

 

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