Fed hikes rates by 75 bps
The U.S. Federal Reserve has announced its biggest interest rate increase since 1994 as it intensifies its fight against surging consumer prices.
At the conclusion of the Federal Open Market Committee meeting on Wednesday afternoon, the central bank hiked its benchmark interest rate by 75 basis points (bps) to a new target range of 1.5%-1.75%.
Fed Chairman Jerome Powell also said in a post-meeting press conference that another 75 bps rate hike is on the table for the next Fed meeting in July.
“From the perspective of today, either a 50 basis point or a 75 basis point increase seems most likely at our next meeting,” Powell said. “We anticipate that ongoing rate increases will be appropriate.”
Stock futures slump as traders digest rate hike
Meanwhile, U.S. stock futures are pointing to a weak open on Thursday, a day after the Fed announce its most aggressive interest rate hike in nearly 30 years.
As of 5 a.m. ET, Dow futures plunged 478 points, or 1.56% to 30,173. S&P 500 futures lost 78.75 points, or 2.08% to 3,714.75 while the tech-heavy Nasdaq 100 futures were down 311 points, or 2.67% to 11,318.
On Wednesday, the Dow Jones Industrial Average gained 304 points, or 1%, to close the session at 30,669. The S&P 500 rose 55 points, or 1.46%, to 3,790, while the Nasdaq Composite climbed 271 points, or 2.5%, to finish at 11,099.
Following a hotter-than-expected inflation reading on Friday, the market had quickly raised its expectations that Fed policymakers would raise rates by 75 bps at its meeting. The Fed initially been expected to announce a hike of 50 bps.
Elon Musk to meet Twitter employees today
In other news, Tesla (TSLA) CEO Elon Musk is scheduled to meet Twitter (TWTR) staff later today in San Francisco.
The Wall Street Journal reports that Musk will announce at the meeting his desire to go forward with his proposed $44 billion takeover of Twitter.
According to the report, the billionaire is set to answer questions previously submitted to him by Twitter employees, for roughly an hour.
Musk is also likely to clarify recent remarks about remote work and touch on his plans for the company, including whether the site will unblock former President Donald Trump following his ban last year.
Twitter stock was up 81 cents, or 2.13% to $38.80 a share in the premarket trading session on Thursday.