The US dollar index rose again to a 20-year high amid rising expectations regarding the Fed's next move on inflation amidst fears of expanding pressure waves that have made an economic recession inevitable and imminent.

Expectations increased regarding the Federal Reserve's direction to raise the interest rate by 75 basis points during its meeting this week, which would be the largest increase since 1994.

According to American reports, Fed members seem to be seriously considering a 75 basis point hike, while previous estimates indicated a 50-point increase.

Dollar Now

Once again, the dollar managed in the past few hours to exceed a 20-year high, as the main dollar index against a basket of currencies rose to levels near 105.26 points.

This comes concurrently with the rise in the 10-year US Treasury bond yield to the highest level in more than 11 years, reaching levels near 3.387%. The yield on US Treasury bonds is currently falling during Tuesday's trading to 3.275%, a decline not exceeding 0.1%.

Gold Now

Gold losses widened yesterday, Monday, to nearly $60 during trading as gold fell near levels of $1810 per ounce. Gold is currently slightly down during Tuesday’s trading by about two dollars per ounce, reaching levels near $1830 per ounce with a decline not exceeding 0.1%.

Strong Expectations

According to The Wall Street Journal, the possible adjustment comes after data released last Friday showed that the annual inflation rate in the United States accelerated to 8.6% in May, the highest level since 1981.

Investor expectations in the markets indicated a probability exceeding 93% for an interest rate hike to a range between 1.50% and 1.75%, compared to the current range of 0.75% to 1%.

Analysts at Goldman Sachs (NYSE:GS) and Nomura Holdings adjusted their expectations regarding the monetary policy decision this week and at the end of next July to a 75 basis point increase instead of 50 basis points.

Barclays (LON:BARC) and Jefferies had earlier this month predicted that the Fed would raise the interest rate by 0.75% in this month's meeting after inflation accelerated more than expected.

Imminent Recession

A recent survey revealed that 70% of economists expect the United States to enter a recession next year, with the Federal Reserve’s efforts to stop inflation acceleration.

The Booth School of Business at the University of Chicago said that about 40% of the 49 economists participating in the survey expected a recession in the first or second quarter of next year.

According to the survey, 33% of participants expected it to come in the second half of the year, and the poll took place after data showed that consumer inflation in the United States reached its highest level in 41 years.

Stock Market Crash

The Dow Jones index recorded a decline of 2.8%, or 876 points, reaching 30,516 points, the S&P 500 dropped about 3.9%, or 151 points, to 3,749 points, and the Nasdaq fell by 4.7%, or 530 points, registering 10,809 points.

In Europe, the Stoxx 600 index closed down 2.4%, or 10 points, at 412 points, and the UK’s FTSE 100 (LON:LSEG) fell 1.5% to 7,205 points.

Meanwhile, the German DAX dropped 2.4%, or 334 points, to 13,427 points, and the French CAC 40 fell 2.7%, or 165 points, recording 6,022 points.