By Andrea Hargraves 
The major US stock exchanges ended the day in the red, after the head of the US Federal Reserve said that more interest rate hikes are coming and that the final rate will be higher than expected.
US indices ended the day in negative territory, after Federal Reserve Chairman, Jerome Powell, went to the Senate to say that the Fed’s benchmark interest rate could be higher than its previous estimate of its peak. Powell made it clear that the fact that inflation and employment remain strong and high means that it is necessary to continue the tightening cycle.
The Standard & Poor’s 500 Index lost 1.53% to 3986.44 points, the Nasdaq Technology Composite Index fell 1.25% to 11530.33 points, and the Dow Jones Industrial Average lost 1.72% to 32856.86 points.
Of the two main market movers, Rivian stock fell 14.54% after the electric vehicle company announced plans to sell $1.3 billion in bonds. Banks were also among the slackers, as investors eyed the possibility that tightening monetary policy could tip the US economy into recession. Wells Fargo lost 4.68%, while Bank of America, Goldman Sachs and JPMorgan lost about 3%.
In the Fed Chairman’s words, the average North American central bankers’ benchmark interest rate forecast, which was 5.1%, is now revised upwards by the market to 5.4% at the end of the year. Thus, investors are pointing to an increase of 50 basis points at the monetary policy meeting on March 21-22.
“At the February meeting, the Fed returned to a 25 basis point hike, but Jerome Powell’s testimony shows that opinion has changed again – with the strength of the data pointing to the need to raise the final interest rate, which means an acceleration in the increase in prices,” said economist James Knightley, economist James Knightley. ING has an “Interest Rates” note.