Interest rate concerns are weighing on the markets.
(Photo: AP)
Frankfort, New York The persistently strong growth of the US economy is fueling fears of an emergency monetary policy brake from the Fed. The US standard value index Dow Jones closed one percent lower on Tuesday at 31,790 points. The tech-heavy Nasdaq fell 1.1 percent to 11,883 points. The broad S&P 500 lost 1.1 percent to 3986 points.
Investors were nervous about the surprisingly sharp increase in the US consumer sentiment index and the unexpectedly high number of job vacancies at 11.239 million, which indicates a persistent labor shortage. This fuels fears that the Fed, in its fight against a wage-price spiral, will plunge the US economy into a recession with drastic interest rate hikes.
Fed Chairman Jerome Powell had already prepared the financial markets for a longer series of significant hikes on Friday. “The message was clear,” said Naeem Aslam, chief market analyst at brokerage firm AvaTrade. “Monetary policy is currently a one-way street.”
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