Recession fears and the Fed's inflation war.

The latest Fed rate move is expected to keep markets on edge next week.

The latest Fed rate move is expected to keep markets on edge next week. Monday is Juneteenth, thus Wall Street will be closed.

The S&P 500 lost 5.8% last week after entering a bear market on Monday. This was the index's 10th loss in 11 weeks.

The U.S. central bank boosted its benchmark interest rate by 75 basis points Wednesday. Jerome Powell hinted at more aggressive tightening as policymakers fight inflation.

Wall Street panicked and stocks tumbled after the move.

The Dow Jones Industrial Average fell over 5% last week, briefly falling below 30,000. The Nasdaq closed higher Friday but lost 1.7% for the week. As risk assets remain under pressure, bitcoin (BTC-USD) fell below $18,000 on Saturday.

While the Fed's unusual action Wednesday reaffirmed its commitment to stabilising prices, investors and experts fear its inflation-fighting policies may cause a recession.

Bank of America analysts said the Fed has fallen far behind and is now playing a perilous catch-up game. The business cut its GDP growth prediction to nearly zero and anticipates a 40% likelihood of recession next year.

In 2021, the bank's research team said a boom-bust scenario was the largest economic risk. Our baseline forecast is the boom-bust scenario.

JPMorgan analysts say the S&P 500's drop means an 85% risk of recession.

Powell will speak before the Senate Banking Committee on Wednesday.

The Fed chief remains certain that the U.S. economy can escape a slowdown, even as market participants lose faith in a "soft landing" — a period when economic growth is slowed just enough to reduce inflation without sparking a recession.

Powell told reporters Wednesday, "We're not aiming to precipitate a recession." Powell reaffirmed the Fed's mission to rein in surging prices at a conference in Washington on Friday.

Powell will speak before the Senate Banking Committee on Wednesday.

The Fed chief remains certain that the U.S. economy can escape a slowdown, even as market participants lose faith in a "soft landing" — a period when economic growth is slowed just enough to reduce inflation without sparking a recession.

Powell told reporters Wednesday, "We're not aiming to precipitate a recession." Powell reaffirmed the Fed's mission to rein in surging prices at a conference in Washington on Friday.

Another sentiment gauge is due next week. The University of Michigan will release its final June sentiment index; the original result was the lowest on record due to inflation.