US stock and bond prices swung lower on Wednesday afternoon after the Federal Reserve signalled that it would begin raising interest rates at its next monetary policy meeting in March.

The benchmark S&P 500 index closed down 0.1 per cent for the day, reversing earlier gains after Jay Powell, Fed chair, declined to rule out raising rates at every policy meeting for the rest of the year. The index’s reversal was briefly 3.4 per cent between its high point and its nadir in late afternoon trading, the biggest downward turn since September 2020.

“In my view, I do not think Fed chair Powell could have been more hawkish during his press conference than if he raised rates today,” said Tom di Galoma, managing director of rates trading at Seaport Global. “I believe all the signs are there for a hike coming at the March meeting followed by at least three more in 2022.”