Shares of banks and other financial institutions tumbled as investors weigh the outlook for interest rates both in the U.S. and abroad.
European Central Bank President Christine Lagarde laid out plans to increase interest rates for the first time in more than a decade, joining many of its peers in raising borrowing costs to tackle persistent inflation that is spreading far beyond the U.S.
For Jerome Powell, her counterpart at the Federal Reserve, it's another sign that central banks all over the world are following his cue to focus more on inflation -- which is now the fastest in four decades -- rather than on shoring up prospects for growth after two years of pandemic. Mr. Powell will likely be focused on Friday's U.S. consumer price index data.
The Fed's next decision -- probably another half-point increase -- arrives next week, on June 15. After that, the Fed will have to judge how high and how fast to raise rates without bringing the economy to a screeching halt.
In corporate news, Credit Suisse Chief Executive Thomas Gottstein said a report that the bank could be taken over by State Street was "really stupid" and that it can repair itself. The CEO is under pressure from investors to show that the bank has a credible strategy after a spate of scandals and financial losses.
Write to Amy Pessetto at amy.pessetto@dowjones.com
(END) Dow Jones Newswires
06-09-22 1742ET
