NEW YORK (AP) — Higher interest rates are coming. And they are coming sooner than you think. That’s the message investors took away from the Federal Reserve on Wednesday. In response, they sent stocks and gold prices lower and bond yields sharply higher. The Dow Jones industrial average lost 114.02 points, or 0.7 percent. The Dow fell as much as 209 points before erasing some of its loss.
The Fed voted to cut its monthly bond purchases from $65 billion to $55 billion, in line with what analysts were expecting. Despite severe winter weather in January and February, the Fed said economy had recovered enough for it to continue reducing the bond buys, which are aimed at keeping long-term interest rates low.