Dow sheds about 140 points, stocks end lower after Fed raises rates and signals more to come

U.S. stocks ended lower in choppy trade after the Federal Reserve raised rates another 50 basis points at its final rate-setting meeting of 2022, a year in which the central bank has quickly jacked up its policy rate to its highest level in 15 years. The Dow Jones Industrial Average ended down about 142 points, or 0.4%, near 33,966, but was well off the session’s low of 33,704.17, according to FactSet. The S&P 500 index fell 0.6%, while the Nasdaq Composite Index shed 0.8%. Fed Chair Powell, in an afternoon news briefing, said more work still needs to be done to ensure that inflation follows a concrete path lower to its 2% annual target, even though November’s consumer-price index this week showed a slowing to a 7.1% annual rate from a peak level above 9% this summer. The Fed’s “dot plot” also indicated the central bank’s policy rate could peak next year at 5.25%, above an earlier 4.75% forecast. Although, the revised forecast still isn’t that far off the Fed’s current federal funds range of 4.25% to 4.5%. Treasury yields rose Wednesday, with the benchmark 10-year rate at 3.503%.

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