Dow plunges in perfect storm for stocks

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Investors got a second-day jolt with the economy slowing as prices and interest rates are expected to keep rising. The Federal Reserve hiked rates by 50 basis points on Wednesday.

Weak readings on retail sales and manufacturing sent ripples through the markets 24 hours after Fed policymakers said interest rates will rise to 5.1% in 2023, higher than initial forecasts, in the quest to bring the 7.1% inflation rate down.

"The largest amount of pain, the worst pain would come from a failure to raise rates high enough and from us allowing inflation to become entrenched in the economy," Fed Chairman Jerome Powell said on Wednesday during his press conference following the central bank's 50-basis-point rate hike.

 

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