“Higher for longer” was the message the market took from the Federal Reserve policy committee’s Wednesday decision. Officials hiked their target interest rate by 0.75 percentage point, and Chairman Jerome Powell drove home the message that there’s more work to be done.
The moves prompted two days of sharp declines from major indexes that the market never recovered from. The Dow Jones Industrial Average finished the week down 1.40%, the S&P 500 lost 3.35%, and the Nasdaq Composite dropped 5.65%. Treasury yields rose across the curve, as investors priced in a higher peak, or terminal, rate and expectations that the Fed will keep rates there for some time.