Wall Street’s main indexes plunged into negative territory immediately after the Federal Reserve announced an expected large hike in interest rates on Wednesday, the latest move by the U.S. central bank to tame decades-high inflation.
At the end of its two-day meeting, the Fed lifted its policy rate by 75 basis points for the third time to a 3.00-3.25% range. Most market participants had expected such an increase, with only a 21% chance of a 100 bps rate hike seen prior to the announcement.
Policymakers also signaled more large increases to come in new projections showing its policy rate rising to 4.40% by the end of this year before topping out at 4.60% in 2023.
By 2:05 p.m. ET (1805 GMT), the Dow Jones Industrial Average .DJI fell 296.82 points, or 0.97%, to 30,409.41, the S&P 500 .SPX lost 36.59 points, or 0.95%, to 3,819.34 and the Nasdaq Composite .IXIC dropped 131.77 points, or 1.15%, to 11,293.28.