Global stocks fall amid fears about faster rate hikes

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Global shares were mostly lower Wednesday as investors fretted that the Federal Reserve might raise interest rates faster if pressure stays high on inflation.

France's CAC 40 shed 0.2% to 7,325.65 in early trading. Britain's FTSE 100 dipped 0.3% to 7,898.54. Germany's DAX inched down less than 0.1% to 15,555.97. U.S. shares were set to drift higher with Dow futures up 0.1% at 32,901.00. S&P 500 futures rose nearly 0.1% to 3,993.25.

Fed Chair Jerome Powell told lawmakers that the central bank would keep interest rates higher if need be to fight inflation. Higher rates can drag down inflation because they slow the economy, but they hurt prices for stocks and other investments. They also raise the risk of a recession later on. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” Powell said. “Restoring price stability will likely require that we maintain a restrictive stance of monetary policy for some time.”

The U.S. government's monthly jobs report, due Friday, will provide an update on wages. The Fed's fear is that too-strong gains could push prices higher.

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