treasury 2year rate moves above its highest level in almost 15 years us stocks traded lower on thursday afternoon as treasury yields and the dollar climbed further a day after the federal reserve delivered a third jumbo interestrate hike and signaled more to come stocks finished sharply lower wednesday after a volatile session with the dow jones industrial average losing 522 points or 17 while the sp 500 declined 17 and the nasdaq composite dropped 18 the sp 500 is down more than 21 for the year and the nasdaq composite has lost roughly 29 over that period us stocks fell again following wednesdays selloff after the federal reserve produced another 75 basispoint rate hike and reiterated its commitment to crush inflation even if it means driving the us economy into a recession we will keep at it until the job is done chair jerome powell said in a news conference on wednesday after the fed increased its policy interest rate for the third time in a row by 75 basis points to a range of 3 to 325 i wish there were a painless way to do that there isnt he added investors were rattled by the feds socalled dot plot which tracks forecasts from individual policy makers it produced a median forecast for a peak fedfunds rate of 46 in 2023  above market expectations fed forecasts also implied that unemployment may rise significantly and the economy slow sharply see fed predicts big slowdown in economy and rising unemployment as it battles inflation powell in his news conference tried very hard to not give the market a silver lining said christian hoffmann portfolio manager and managing director atthornburg investment management in santa fe new mexico the dot plot remains uncomfortable for the fed as they really cant reveal an expectation to lose the war on inflation nor can they reveal an expectation to destroy the economy hoffman said in emailed comments read the stock market tumbled because jerome powells fed isnt going to blink as stocks slumped the cboe volatility index  a measure of expected sp 500 volatility known as wall streets fear gauge was hovering around 28 near its highest level since the end of june and well above the long run average of 20 but still shy of levels that have typically signaled capitulation evercore isi wednesday cuts its yearend sp 500 target to 3975 from 4200 and expects a full retest of the june low in the weeks ahead to reflect a rising probability of a recession the latest stock market relapse leaves the benchmark sp 500 index precariously placed having decisively broken below perceived support at 3900 and is now within sight of the lows for the year of 3667 in june analysts observed after several days of chop between the 3850 and 3900 the sp 500 got a final rejection of 3900 today before closing under 3800we believe the pain trade is lower given todays wednesdays downside reversal and a continued lack of any capitulatory signals we think the path to the june lows might be faster than many anticipate wrote jonathan krinsky chief market technician at btig however krinsky stressed that though the market was continuing to face seasonal headwinds such conditions should improve by midoctober we think we test or break the june lows before then which should set up a better entry point for a yearend rally he concluded see also fed will tolerate a recession and 5 other things we learned from powell us investors digested a couple of economic data reports early thursday including the latest read on jobless claims which showed that new applications for unemployment benefits edged higher to 213000 last week however the us labor market remains robust data showed the currentaccount deficit for the second quarter shrunk compared with the same period last year likely due to the impact of the stronger dollar seejobless claims edge up to 213000 but still show strong labor market and few layoffs outside the us the trend for tighter monetary policy among developed nations continued apace on thursday  with one notable exception norways central bank raised borrowing costs by 50 basis points to 225 and the swiss national bank hiked by 75 basis points to 05 the bank of england also hiked rates by half a percentage point but the bank of japan left policy unchanged leaving overnight rates at minus 01 as it maintained that inflation of 28 mainly reflects surging commodity prices the boj promptly intervened in the market pushing the dollar lower a trend also reflected in the euro and sterling and a move which helped sentiment in us equity futures where the greenbacks recent surge to a more than 20year high has proved a headwind of late the ice us dollar index  a gauge of the dollars strength against a basket of rivals climbed above 111 for the first time since 2002 bond yields surged to multiyear high with the yield on the 2year treasury moving further above its highest level since 2007 the yield on the 10year treasury advanced to 3680 seea punishing selloff in shortterm debt is pushing one rate near the magic level that frightens markets