The Fed raised the benchmark interest rates by 75 basis points yesterday, marking the largest hike in 28 years. The central bank is slated to maintain its aggressive stance in the near term, as Chairman Jerome Powell foresees a 50-basis point or a 75-basis point rate increase in July.
However, equity markets have reacted negatively to this news, as analysts and economists reiterated their expectation of a recession in the near term. The benchmark S&P 500 index declined 20.5% year-to-date and 5.7% over the past five days, driven by surging market volatility.
