Kevin Warsh used his first press conference as Federal Reserve Chair to pledge a decisive fight against inflation, signaling a policy shift few investors had expected.
A broad selloff began with the June’s hawkish dot plot, which signaled the committee’s preference for one rate hike this year — a sharp U-turn from the cut penciled in back in March — and it deepened as Warsh spoke after 2:30 p.m. ET.
When measured from 2.00 p.m. ET levels, the S&P 500 – as tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY) – had fallen 1.2% to 7,440 points by 3:30 p.m. ET, hitting session lows as Warsh closed his remarks.
The policy-sensitive two-year Treasury yield pushed up to 4.20%, extending the jump it began on the statement.
The Nasdaq 100 dropped 1.2% to 29,786, the Dow Jones Industrial Average lost 1.3% to 51,637 and the small-cap Russell 2000 sank 2% to 2,921.
