US stocks fell in volatile action on Wednesday after Federal Reserve announced a 75 basis points hike and hinted at a slower pace in the future. By a unanimous vote, the Fed hiked its rate by 0.75 percentage points to a range of 3.75% to 4%.

As traders tried to forecast the next move after it delivered another widely expected three-quarter point interest rate hike the Dow Jones Industrial Average was trading 88.04 points or 0.27% down. The S&P 500 and Nasdaq Composite last traded 1.12% and 1.61% lower, respectively.

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The statement indicated a possible policy change, saying the Fed “will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”

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Stocks initially surged as traders cheered the scope of a possible slowdown in the central bank’s monetary tightening. However, the major indices declined after Fed Chair Jerome Powell said in a press conference that rates could still go higher. “We still have some ways to go and incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected,” he said.

Stocks slipped to their lowest of the session when Powell said it was “premature” to talk about pausing hikes.

“We have a ways to go,” said the Fed chair.

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“Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks,” FOMC said in a statement.

″‘Cumulative tightening’ and ‘lagged impact’ suggest that this will be the last 75 bp hike and in December the move will most likely be 50 bp,” said Ian Lyngen, BMO’s head of US rates.

Also Read: US stocks turn red ahead of Fed policy decision

Treasury yields fell after the Fed indicated a possible slowdown in the pace of increases. The yield on the 10-year Treasury, which has a big impact on mortgage rates and other types of consumer and corporate loans, traded 7 basis points down to 3.97% after trading above 4% earlier in the day. However, the rates are still significantly higher than the level of just above 1.5% that they ended at in 2021. The policy-sensitive two-year Treasury yield slipped 9 basis points to 4.44%.