Global stock markets plunged on Monday after Wall Street ended this week with losses amid concerns about the Federal Reserve's plans for further interest rate hikes to curb inflation.

US stock indexes also finished the week with losses after Federal Reserve official James Bullard raised investor concerns by indicating that the central bank’s key lending rate might need to be raised to nearly double its already high level.

At the start of trading, the FTSE 100 in London lost 0.5% to 7352.63. The DAX index in Frankfurt fell 0.3% to 14385.04, and the CAC 40 in Paris declined 0.2% to 6631.30. On Wall Street, the S&P 500 index dropped by 0.4%. 

On Friday, however, the S&P 500 rose by 0.5%. The Nasdaq Composite lost less than 0.1%.

For his part, Bullard, president of the Federal Reserve Bank of St. Louis, suggested that the Fed’s benchmark interest rate might need to rise to between 5% and 7%, which would raise it from its current level of 3.75% to 4% after four hikes of 0.75 percentage points—three times the Fed’s usual margin.

Because of that, investors are concerned that repeated rate hikes by the Federal Reserve and central banks in Asia and Europe this year to curb high inflation could push the global economy into recession.

While traders hope that signs of slowing economic activity and easing inflation pressures might push the Federal Reserve to ease its plans.

Officials at the Federal Reserve, including its chairman Jerome Powell, also warned that rates might need to stay high for a long time to extinguish inflation.

Likewise, traders expect the Federal Reserve to raise the key interest rate again at its December meeting but by a smaller margin of 0.5 percentage points.