The US stock market is preparing for a more aggressive tightening of monetary policy by the Fed

On Thursday, US stock indices fell sharply after a Federal Reserve spokesman stoked fears of an aggressive interest rate hike. St. Louis Fed President James Bullard supported a 1% Fed rate hike by July after consumer price inflation jumped to 7.5% in annual terms, the fastest pace since 1982. The probability of a 50 basis point interest rate hike from the Fed next month increased to 89.9% from 24% the day before. High volatility in the stock market is likely to continue until the Fed meeting in March.

Goldman Sachs Group expects the Federal Reserve to raise interest rates seven times this year, rather than five as previously expected, to curb rising inflation in the US. “Most Fed officials who have commented have opposed a 50 basis points hike in March,” Goldman analysts wrote in a note. “We therefore think that the more likely path is a longer series of 25 basis points hikes instead,” the bank’s strategists wrote.

Leading European politicians have said the bloc would “do very well without Facebook” if the Meta-owned social network left the EU. Meta warned this week that it could leave the EU bloc if Europe does not allow it to conduct “transatlantic data transfers.”

Yesterday, oil prices fell after the release of US inflation data. When inflation is growing, the dollar index rises, which increases the cost of buying oil through other currencies. In the mid-term, the growth of the dollar index and the possible entry of Iranian oil into the world market puts pressure on oil quotes. On the other hand, geopolitical tensions in the Middle East and Eastern Europe and declining crude oil reserves are holding oil prices down. As a result, oil is in some balance between two opposite scenarios.

Asian stock markets are mostly down today after the US market decline yesterday. Australia’s S&P/ASX 200 (AU200) fell by 0.98%, and Hong Kong’s Hang Seng (HK50) lost 0.29%. Today is a bank holiday in Japan. Reserve Bank of Australia Governor Philip Lowe said the country’s central bank would patiently pursue the monetary policy as long as inflation is stable within the target range.