Photo illustration: Sarah Grillo/Axios. Photo: Brendan Smialowski-Pool/Getty Images
Wall Street on Friday suffered its worst day so far this month, as the S&P 500 plunged by over 2%.
Driving the news: In recent days , Federal Reserve officials — including chair Jerome Powell — have made it clear that nothing is off the table when it comes to corralling surging inflation. That intensified a sell-off in both stocks and bonds that drove up interest rates.
- On Thursday, Powell suggested that the Fed is likely to raise rates by a half percentage point hike when it meets in May.
- In addition, San Francisco Fed's Mary Daly told Yahoo Finance that the economy no longer needs all the liquidity that the central bank has been providing.
Why it matters: Rising rates are having spillover effects on mortgage rates and consumer activity overall. They're also fanning fears of an economic slowdown that may spark a recession.
What they're saying: "Markets are very uneasy about the growing likelihood of a policy error by the Federal Reserve," wrote Jamie Cox, managing partner for Harris Financial Group, in an emailed note.
- "When a Fed official suggests a 50 basis points hike, markets immediately start trying to price in 75 basis point hikes. It's madness really," he added.