Wall Street headed for another day of losses early Friday after interest rate hikes by the Federal Reserve and other central banks sparked fears of a possible global recession and pushed oil prices to their lowest level since the opening days of 2022.

Futures for the Dow Jones Industrial Average fell 1.1%, and futures for the S&P 500 declined 1.2%. Except for the sharp swing, major U.S. indices are preparing to end the week with losses for the fourth time in five weeks. Oil prices dropped 3 percent, threatening to fall below $80 per barrel for the first time since early January.

Central banks in Britain, Switzerland, Turkey, and the Philippines also raised interest rates after the Federal Reserve raised the main interest rate on Wednesday for the fifth time this year and indicated that more hikes are on the way.

Edward Moya of OANDA said in a report, "Global stocks are struggling as the world expects higher prices to lead to an imminent and possibly severe global recession."

In the same context, the new British government on Friday announced a comprehensive tax cut plan said to be financed through borrowing and revenues generated by expected growth, causing the pound to fall below $1.12 for the first time since 1985. Economists expressed concern that the government's policies could lead to a sharp increase in borrowing, undermining confidence in the British economy.

On Friday as well, the Vietnamese central bank raised the main lending rate by a full percentage point, surprising forecasters. It seems the Vietnam central bank is trying to tame inflation while deterring capital outflows in search of higher interest rates abroad, as investors worry that central banks may be willing to endure a painful economic recession to control prices.

Some indications point to the U.S. economy cooling with the Federal Reserve supporting a retreat from its plans for further interest rate hikes. But President Jerome Powell said that interest rates on Wednesday would remain high for a long time if necessary to bring inflation back to its 2% target.

While U.S. consumer price inflation fell to 8.3% in August from the previous month's peak of 9.1%, core inflation, which excludes volatile food and energy prices to give a clearer picture of the trend, rose to 0.6% compared to the previous month, up from 0.3% in July, indicating that upward price pressures remain strong.

The Federal Reserve raised its benchmark interest rate on Wednesday, which affects many consumer and business loans, to a range of 3% to 3.25%, with forecasts showing it expects the benchmark rate to reach 4.4% by the end of the year, a full percentage point higher than expected in June.