The federal funds rate stands at a range of 4.25% to 4.5%, the highest level in 15 years.
Wall Street racked up more losses Friday, as worries mounted that the Federal Reserve and other central banks are willing to bring on a recession if that’s what it takes to crush inflation.
The S&P 500 fell 1.1%, its third straight drop. The Dow Jones Industrial Average dropped 0.9% and the Nasdaq composite lost 1%. The major indexes marked their second straight weekly loss.
The pullback was broad. More than 80% of stocks in the benchmark S&P 500 fell. Technology and health care and stocks were among the biggest weights on the market. Microsoft fell 1.7% and Pfizer slid 4.1%.
The Fed this week raised its forecast for how high it will ultimately take interest rates and tried to dash some investors’ hopes that rate cuts may happen next year. In Europe, the central bank came off as even more aggressive in many investors’ eyes.
“Inflation continues to be the monster in the room,” said Liz Young, head of investment strategy at SoFi.
Inflation has been easing from its hottest levels in decades, but remains painfully high. That has prompted the Fed to maintain its aggressive attack on prices by raising interest rates to slow economic growth. The strategy increasingly risks slamming on the brakes too hard and sending an already slowing economy into a recession.
“Whether it’s a mild, medium, or deep recession is still unknown,” Young said.
A mixed report from S&P Global on Friday highlighted the recession risk.
