The SPDR S&P 500 ETF Trust (NSYE: SPY) dropped sharply this week as investors priced in the Federal Reserve's more aggressive approach to raising interest rates.
On Wednesday, the Federal Open Market Committee raised its fed funds target range by 0.75% to between 1.5% and 1.75%. The move marks the first time the Fed has raised interest rates by 0.75% in one meeting since 1994, and Fed Chair Jerome Powell said another 0.75% rate hike is on the table for the Fed's July meeting as well. In its updated economic projections, the Federal Reserve raised its outlook for 2022 personal consumption index inflation to 5.2%, up from 4.3% in March.
