Dow industrials turn south as minutes imply Fed could tighten financial conditions sooner and faster in 2022

U.S. stock benchmarks took a turn lower and losses deepened for the Nasdaq Composite Wednesday afternoon after minutes from the Dec. 14-15 meeting of the Federal Open Market Committee, released at 2 p.m. ET, indicated that policy makers could tighten financial conditions sooner and faster than market participants had anticipated. At the meeting, the Fed said that it could raise its benchmark interest rate three times this year, which the market had already priced in. To prepare for rate hikes, the central bankers enacted a revised plan to taper asset purchases so they will end completely in March instead of June. However, market participants started to price in four rate hikes in 2022 and a reduction of the Fed’s balance sheet, which combined amount to tightening of what has been easy-money policies since the pandemic took hold in the U.S. in March of 2020. The Dow Jones Industrial Average DJIA, -1.07% was trading 0.1% lower at 36,748, the S&P 500 index SPX, -1.94% was down 0.8% to trade at 4,755, while the Nasdaq Composite Index COMP, -3.34% was trading 1.9% lower at 15,325.