The market sentiment was that the Fed would announce a more ...

The market sentiment was that the Fed would announce a more "hawkish" (a more aggressive plan) tightening of its monetary policy. So what does this all mean?

Monetary policy has two main levers, the money supply, and interest rates. Without getting too deep in the weeds, the money supply is the quantity of money circulating in the economy. As the central bank, the Federal Reserve creates money by buying assets and adding them to its balance sheet. These transactions are primarily US Government bonds and mortgage backed securities. The Federal Reserve was aggressive by expanding the balance sheet to over $8.9 trillion through March of 2022. $S&P 500 Index (.SPX.US)$ $Dow Jones Industrial Average (.DJI.US)$ $Nasdaq Composite Index (.IXIC.US)$ $Invesco QQQ Trust (QQQ.US)$