World markets plunge on growing recession fears

Stock markets tumbled, the pound crashed against the dollar and oil prices slumped on Friday on growing recession fears after central banks this week ramped up interest rates to fight decades-high inflation. With price rises showing no solid sign of letting up, monetary policymakers have been forced to go on the offensive, warning that short-term hits to economies are less painful than the long-term effects of not acting. The Federal Reserve's decision on Wednesday to lift borrowing costs by 0.75 percentage points for a third successive meeting was followed by a warning that more big rises were in the pipeline and that rates would likely come down only in 2024. That came along with similar moves by banks in several other countries including Britain, Sweden, Norway, Switzerland, the Philippines and Indonesia – all pointing to a dark outlook for markets. "We see this new even-higher-for-longer rate path as associated with a substantially higher likelihood of a hard landing, and so not just unambiguously hawkish but unambiguously bad for risk," said Krishna Guha, vice-chair of Evercore ISI. In a sign that recession expectations are rising, the 10-year US Treasury yield jumped to...