Fed Chair Jerome Powell says the central bank must move faster than it has previously to tackle inflation.
Stocks shed early gains and ended broadly lower on Wall Street Thursday after the head of the Federal Reserve said the central bank needs to take more aggressive action to fight high inflation. In a panel discussion held by the International Monetary Fund, Fed Chair Jerome Powell said the Fed must move faster than it has previously to tackle inflation, which suggests sharp interest rate increases are likely in coming months. The S&P 500 closed 1.5 percent lower after having been up 1.2 percent in the early going. The Dow Jones Industrial Average fell 1 percent and the Nasdaq slid 2.1 percent. The afternoon sell-off left the S&P 500 flat for the week and knocked the Nasdaq into the red. Both indexes came into this week with two consecutive weekly declines. The benchmark S&P 500 fell 65.79 points to 4,393.66. The Dow dropped 368.03 points to 34,792.76. The Nasdaq slid 278.41 points to 13,174.65. Smaller company stocks fell more than the broader market. The Russell 2000 gave up 46.72 points, or 2.3 percent, to 1,991.46. The broader market has had a choppy week as investors review the latest round of corporate earnings amid lingering concerns about rising inflation and the Fed’s shift away from an ultra-low interest rate policy. The Fed has already announced a quarter-percentage point rate hike and Wall Street expects a half-percentage rate hike at its next meeting in two weeks. Other central banks have also moved to raise interest rates to try and temper the impact of rising prices on businesses and consumers. During the panel discussion Thursday, Powell suggested that “there’s something in the idea of front-loading” aggressive rate hikes as the Fed grapples with inflation that has reached a four-decade high.
