Jerome Powell seems to have spooked the markets after his widely anticipated speech. He warned that interest rates are likely to end up higher than initially expected as inflation numbers appear to be reaccelerating once again.
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As a result, he suggested that larger rate hikes may still be on the table if inflation continues to run too hot for the central bank’s liking. It’s safe to say that the fight against inflation is far from over, and the market’s reaction today reflects that.
Indeed, the SPDR S&P 500 ETF Trust (SPY) fell sharply following Powell’s announcement after opening the day in the green. At the time of writing, it is down 0.78%.