The stock market extended its three-week decline and put the benchmark S&P 500 on track for a so-called correction — a drop of 10% or more from its most recent high.
But rising prices at supermarkets, car lots and gas stations are raising concerns that consumers will pare back spending to limit the pressure on their budgets.
The Fed has kept downward pressure on longer-term interest rates by buying trillions of dollars worth of government and corporate bonds, but those emergency purchases are scheduled to end in March.
The S&P 500 fell 2% to 4,310, and is now down about 10.1% from the closing high it set on Jan.
Bitcoin fell as low as $33,000 overnight but had rallied back above $36,000 in the early afternoon.
They argue that numerous rate hikes would risk causing a recession and wouldn’t slow inflation in any case.
When the Fed boosts its short-term rate, it tends to make borrowing more expensive for consumers and businesses, slowing the economy with the intent of reducing inflation.
The Fed’s benchmark short-term interest rate is currently in a range of 0% to 0.25%.
Wall Street anticipates the first increase in interest rates in March.
On Tuesday, American Express, Johnson & Johnson, and Microsoft report results.