Interest rates rise due to inflation in the US 1:21
(CNN) --
US markets gave back yesterday's gains on Thursday morning as investors further weighed the Fed's message of the possibility of a looming recession.
Stocks soared in the immediate aftermath of the Fed meeting when Fed Chairman Jerome Powell announced he would raise interest rates by 75 basis points with another 50 or 75 basis point hike likely in July, signaling his commitment to fight inflation.
But market sentiment soured Thursday morning as investors began to question whether the Fed could execute a soft landing and stave off recession, something Powell said would be difficult to achieve.
The Dow fell 737 points, or 2.4%.
The S&P 500 fell 2.8%.
The Nasdaq Composite fell 3%.
The Bank of England raises interest rates again as inflation approaches 11%
General view of the Bank of England (BoE) in the City of London on February 5, 2021. - The Bank of England on Thursday projected Britain's economic recovery thanks to the success of the introduction of vaccines in the country, while it froze interest rates and stimulus.
(Photo by Niklas HALLE'N / AFP) (Photo by NIKLAS HALLE'N/AFP via Getty Images)
The UK central bank raised interest rates for the fifth time since December in an attempt to rein in spiraling inflation.
The Bank of England announced on Thursday that it will raise the cost of borrowing by 25 basis points to 1.25%, despite fears that rising prices are putting pressure on households and weighing on economic growth.
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"Bank staff now expect GDP to fall 0.3% in the second quarter as a whole, weaker than forecast at the time of the May report," the Bank of England said in a statement.
“Consumer confidence has continued to fall, but other measures of household spending seem to have held up. Some indicators of business confidence have weakened, although they have so far remained more resilient than indicators of consumer confidence. consumers and are consistent with positive underlying GDP growth," he added.
Rising food and fuel prices have plunged millions of Britons into the worst cost-of-living crisis in decades.
Annual consumer price inflation rose to 9% in April, its highest level since 1992, and is expected to slightly exceed 11% in October, with energy costs driving the increase.
CNN's David Goldman contributed to this report.
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