Fed Chair Powell may back two or more half a percentage point rate hikes: “I would say 50 basis points will be on the table for the May meeting,” Powell said Thursday at a CNBC-moderated International Monetary Fund (IMF) roundtable ). Curbing inflation is “absolutely necessary”.

Powell’s comments are essentially in line with market expectations. Nevertheless, the Dow Jones fell by 1.1 percent to 34,793 points. The Nasdaq, with its interest-sensitive technology stocks, lost more than two percent. The S&P 500 lost 1.5 percent to 4,394 points. Investors on Wall Street may have used the price gains of the past few days to take profits.

The leading German index fell by 1.28 percent in the first few minutes of trading. MDAX, SDAX and TecDAX fell between 0.95 and 1.72 percent.

“Our goal is to use our tools in such a way that inflation comes down without being followed by an economic slowdown that amounts to a recession,” Powell said.

“It is absolutely necessary to restore price stability,” he added. “Without price stability, an economy does not work.” Apart from the dangerous inflation, the US economy is otherwise “very strong”.