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STORY: Wall Street's main indexes see-sawed before slumping in the final 30 minutes of trading to close sharply lower on Wednesday, as investors absorbed the Federal Reserve’s latest rate hike and future policy commentary.

The Dow, S&P and Nasdaq all fell roughly one and three-quarters percent... extending September’s steep losses.

At the end of its two-day meeting, the Fed lifted its policy rate by 75 basis points for the third time to a three to three-and-a-quarter percent range – which most investors had expected.

But some may have been surprised by policymakers signaling that more large increases are to come.

Kevin Mahn is President and Chief Investment Officer at Hennion & Walsh Asset Management.

“While I didn’t believe that they were going to start cutting rates in 2023, I’m surprised that they’re going to keep going. At this point in time, as we know, they don’t meet in October. They come back in November and have one more meeting in December as well. I believe they’re going to turn less hawkish in November and December and perhaps only raised by 50 basis points in November and 25 basis points in December. That type of less hawkish, not necessarily dovish, but less hawkish pivot, should provide an upswing for stocks under the notion that the worst is now behind us.”

Rate cuts are not foreseen until 2024, the central bank added, dashing any outstanding investor hopes that the Fed was betting on getting inflation under control in the near term.

Inflation has been running at more than three times the central bank’s 2% target.

Perhaps also weighing on stocks Wednesday... the Fed's new projections showed the economy slowing to a crawl in 2022, with year-end growth of just 0.2%, rising to 1.2% in 2023, well below the economy's potential.