Shares of banks and other financial institutions fell sharply after the Federal Reserve's hawkish policy statement.
The Fed's surprise warning that it would continue its current path into 2023 weighed on global markets, amid fears that the central bank would overdo its tightening, dragging the U.S. into recession.
"The Fed is not anywhere close to a pause or a pivot," said Bill Zox, a portfolio manager at money manager Brandywine Global, in e-mailed commentary. "They are laser-focused on breaking inflation. A key question is what else might they break."
Investment banks including Bank of America, Credit Suisse Group and Goldman Sachs Group are set to collectively lose more than $500 million on debt backing the acquisition of software maker Citrix Systems, the largest U.S. leveraged buyout of the year. The deal preceded the sharp increase in bond yields and selloff in tech stocks.
Fed Chairman Jerome Powell said interest rates should be above the rate of inflation, based on forward looking measures, across the yield curve for the central bank to consider slowing rate increases.
Jesse Powell, an early bitcoin backer and co-founder of the cryptocurrency exchange Kraken, plans to step down from his role as chief executive, the company said.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
09-21-22 1705ET
