Rate hikes could cost 2 million jobs

The Fed has lifted rates three times since last summer and is widely expected to raise them again at its next meeting on March 16-17.

On Tuesday, US stocks fell sharply after Federal Reserve Chair Jerome Powell warned that interest rate hikes are “likely to be higher than previously anticipated.” Market expectations for a half-point rate hike spiked, shifting from a 30% probability to almost 70% by day's end, according to the CME FedWatch Tool. All three major indexes dropped steeply, with the Dow closing 575 points, or 1.7%, lower and the S&P 500 and Nasdaq Composite falling 1.5% and 1.3%, respectively.

Powell's hawkish stance against inflation comes as US consumers' outstanding credit grew by $14.8 billion in January from the month before, according to data released Tuesday by the Federal Reserve. Economists were projecting a $20 billion jump, per Refinitiv. A key recession indicator was also triggered in Tuesday trading as the yield on the 2-year Treasury note fell below that of the 10-year Treasury note, a sign that investors are worried about the immediate


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