and sharply increased its outlook for how high it expects to raise rates in coming months.
The S&P 500 fell 1.7% to its lowest level since mid-July after wavering between gains and losses as traders considered the impact of the Fed's update on interest rates, which have widespread effects on markets and the economy. The Fed is raising rates to fight the worst inflation in 40 years. The worry is that the Fed may cause a recession by slowing the economy too much.
More than 90% of the stocks in the S&P 500 fell, with retailers, banks and technology companies among the heaviest weights on the benchmark index. Amazon dropped 3%, Bank of America shed 3% and Apple fell 2%. , to a range of 3% to 3.25%, the highest level in 14 years, and up from zero at the start of the year.
Central banks worldwide are also dealing with inflation. The Bank of Japan began a two-day monetary policy meeting Wednesday, although analysts expect the central bank to stick to its easy monetary policy. Rate decisions from Norway, Switzerland and the Bank of England are next. Sweden surprised economists this week with a full-point hike.