US equity indexes were mixed on Friday as dip buyers ignored hawkish comments from Fed officials in order to keep weekly losses to a minimum.
The S&P 500 index fell 0.3% after falling as much as 1%, with consumer staples and utility stocks leading the way. The benchmark was down 0.3% for the week, but the Nasdaq 100 was up 0.4% for the week.
After policymakers said Thursday that larger hikes were not out of the question, traders fully priced in quarter-point interest rate increases at the Fed's next two meetings.
President of the Federal Reserve Bank of Richmond, Thomas Barkin, stated on Friday that he favours a quarter-point interest rate hike in February to give the central bank "flexibility" in its efforts to control inflation. Fed Governor Michelle Bowman stated that rates must continue to rise because inflation remains "far too high."
Investors have increased their bets on how far the Fed will raise interest rates during this tightening cycle. According to trading in the US money markets, they now expect the federal funds rate to rise to nearly 5.3% in July. In comparison, the perceived peak rate at the beginning of the month was 4.9%.