The major market indexes declined significantly following the Fed’s third consecutive 75-basis point rate hike to squash the high inflation. As markets weighed the recession threat, bond yields soared to new highs. The 10-year Treasury yield jumped to 3.9%, reaching its highest level since 2010. The 2-year Treasury yield surged to 4.3%.
Since inflation continues to remain at an uncomfortably high level, the Federal Reserve has reiterated its intention to raise interest rates until it meets its long-term inflation target. Fed Chair Jerome Powell said the effort might pull the United States into a period of subpar growth and higher unemployment but letting inflation increase would bring "far greater pain.”
