US 3 Consecutive Giant Steps Lead to New York Stock Market Decline... 2-Year Treasury Yield Surpasses 4.1%

[Asia Economy New York=Special Correspondent Joselgina] Major indices on the U.S. New York Stock Exchange reversed their previous upward trend and turned downward on the 21st (local time) after the central bank, the Federal Reserve (Fed), announced a third consecutive giant step (0.75 percentage points) rate hike.

As of 2:20 p.m. Eastern Time, the Dow Jones Industrial Average was trading down 0.72% from the previous close. The large-cap-focused S&P 500 index was down 0.69%, and the tech-heavy Nasdaq index was down 0.80%.

The Fed announced after the Federal Open Market Committee (FOMC) regular meeting that it would raise the federal funds rate by 0.75 percentage points from the previous 2.25?2.50% range to 3.0?3.25%. This third consecutive giant step was taken as inflation proved stubborn despite aggressive tightening.

As a result, the U.S. benchmark interest rate reached its highest level since January 2008. The Korea-U.S. interest rate differential, which had been equalized due to the Bank of Korea's baby step, reversed again.

Immediately afterward, in the New York bond market, the yield on the U.S. 2-year Treasury note, sensitive to monetary policy, surpassed 4.1% right after the Fed's rate hike announcement. This is the highest level since 2007. The 10-year Treasury yield also rose to around 3.614%.

Fed Chair Jerome Powell will hold a press conference starting at 2:30 p.m.

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