- The stock market's rise in response to the Fed's decision was short-lived ahead of Friday's jobs report, as traders fretted that officials would struggle to combat inflation in the face of a recession.
- The S&P 500 plunged barely a day after posting its greatest gain in two years, with more than 95% of its businesses falling. The Nasdaq 100 made one of its most dramatic reversals in history. The technology index fell almost 5%, wiping all its post-Fed gains. The 10-year yield has risen above 3% due to a selloff in long-end treasuries. the dollar climbed.
- Markets were rocked by worries that policymakers could stop spiralling prices, with the spectre of stagflation frightening investors. Fed Chair knocked back speculators' most aggressive projections by opposing a 75-basis-point rise in June. However, the path ahead is still rough, with crucial economic data and geopolitical happenings that could raise worries about the central bank's strategy. Friday's jobs report is likely to show healthy payroll growth and wages maintaining at historically high levels, implying that inflationary pressures will persist.
- The rise in longer-dated yields has an impact on borrowing costs, which is important for the whole economy. Mortgage rates in the United States have started to rise again, reaching their highest level since August 2009. Separate data released on Thursday indicated that productivity fell to its lowest level since 1947 in the first quarter as the economy shrunk, while labour expenses rose, indicating an exceptionally tight labour market.
- The pound fell abroad as investors switched their attention away from the Bank of England's rate hike and to expectations for a recession in 2023. Andrew Bailey, governor of the Bank of England, said the UK economy is already slowing due to a squeeze on consumer purchasing power, which will help lower inflation next year.
