Wall Street is losing more than 1% driven by Paul Whelen

The Treasury Secretary has made it clear that she is not working to secure all deposits. “If we need to raise interest rates, we will,” Powell said.

The statements of US Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen did not sit well with investors, as Wall Street ended the day losing more than 1%.

The Dow Jones Industrial Average fell 1.63% to 32,030.11 points, while the Standard & Poor’s 500 Index fell 1.69% to 3,936.97 points.

In turn, the Nasdaq Technology Index fell by 1.6%, to 11,669.96 points.

The banking sector was the sector that punished investor sentiment after Treasury Secretary Janet Yellen made it clear that she was not working with the federal agency responsible for insuring all deposits.

It should be remembered that Bloomberg advanced that the Treasury was considering covering all losses with deposits, even without congressional approval, by resorting to the Exchange Stabilization Fund, bypassing the rule of guaranteeing only the first $250,000 in custody.

The session was further pressured by the Federal Reserve’s announcement of a 25 basis point increase in the key interest rate. Moreover, in its projections, the central bank has kept interest rates peaking at 5.1% this year.

After the meeting and at the press conference, Powell made it clear that “if we need to raise interest rates, we will.”

Also in the statement, the FOMC “expects that consolidation may be appropriate” in terms of rate hikes, “to achieve sufficiently restrictive monetary policy to return inflation to 2% over the long term.”