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NEW YORK- An index of global stock markets fell, while short-term US Treasury yields rose after Federal Reserve Chair Jerome Powell said the US economy will need tight monetary policy “for some time” before inflation is under control.

The dollar erased early losses to turn positive against a basket of currencies, while gold, which loses appeal as interest rates rise, fell after Powell’s comments.

Tight monetary policy “for some time” means slower growth, a weaker job market and “some pain” for households and businesses, Powell said in a speech to the central banking conference in Jackson Hole, Wyoming.

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“Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions,” Powell said.

He did not hint at what the Fed might do at its upcoming Sept. 20-21 policy meeting. Officials are expected to approve either a 50- or 75-basis-point rate increase.

Interest rate futures tied to expectations about Fed policy fell on Friday moments after Powell’s speech, reflecting increased chances of a third straight 75-basis-point rate hike.

“It was hawkish as expected. Powell’s message is clear: the Fed is far from done in its fight against inflation,” said Antoine Bouvet, senior rates strategist at ING in London.

MSCI’s gauge of stocks across the globe shed 2.47 percent, its worst day in more than two months.

Wall Street’s main indexes fell, with Powell’s comments dragging down megacap growth and technology stocks.

“His comments were hawkish. He’s keeping the pedal to the metal here when it comes to policy to fight inflation,” said Lindsey Bell, chief money and markets strategist at Ally.

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