Australian share market sheds $45billion in value after US Fed warns higher rates here to stay

The Australian share market has plunged by 1.7 per cent – losing more than $45billion after US Federal Reserve chairman Jerome Powell warned higher rates were here to stay.

The benchmark S&P/ASX200 opened 1.74 per cent as investors on the Australian Securities Exchange reacted badly to his Friday night speech.

Mr Powell had told the Jackson Hole central bank symposium in Wyoming that higher interest rates were needed to tackle the worst American inflation in four decades.

‘Restoring price stability will likely require maintaining a restrictive policy stance for some time,’ he said.

‘The historical record cautions strongly against prematurely loosening policy.’