(Bloomberg) — Bond yields jumped after Federal Reserve officials signaled they’ll begin dialing back the stimulus that has fueled the recovery from the pandemic.

Stocks pared earlier loses after Fed Chair Jerome Powell downplayed the risk of an immediate rate increase. The S&P 500 index had initially tumbling when policymakers disclosed that they expect two interest rate increases by the end of 2023. The dollar strengthened versus major peers. Yields on benchmark 10-year Treasury notes rose from an almost three-month low, while five- and seven-year notes fell more.

Crude oil edged lower after earlier rising as much as 1.2% in New York as the strengthening dollar reduced the appeal of commodities priced in the currency.

“First blush is obviously a hawkish read,” said Michael Contopoulos, Richard Bernstein Advisors LLC’s director of fixed income and portfolio manager. “This supports the reflation, higher rates theme and likely adds more fuel to the taper talk fire for Jackson Hole or September FOMC at the latest.”

The central bank held the target range for its benchmark policy rate unchanged at zero to 0.25% — where it’s been since March 2020 — and pledged to continue asset purchases at a $120 billion monthly pace until “substantial further progress” had been made on employment and inflation.

The quarterly projections showed 13 of 18 officials favored at least one rate increase by the end of 2023, versus seven in March. Eleven officials saw at least two hikes by the end of that year. In addition, seven of them saw a move as early as 2022, up from four.

“The number of people who moved forward into 2023 is somewhat surprising,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Co.

In a press conference after the rate decision announcement, Powell appeared to throw some cold water on the market’s initial reaction to the dot plot revision — by going to some lengths to explain that the central bank isn’t really thinking about rate increases right now.

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“The Fed didn’t rock the boat,” said Ryan Detrick, chief market strategist at LPL Financial. “They increased their inflation outlook and upped GDP forecasts, everyone expected that. Yes, the first hike will now be in 2023, but again, this shouldn’t have been a surprise to anyone.”

For more market commentary, follow the MLIV blog.

Here are some key events to watch this week:

U.S. Treasury Secretary Janet Yellen testifies before a House panel Thursday on the federal budgetRate decisions come from Switzerland and Norway on ThursdayThe Bank of Japan’s monetary policy decision is on Friday

These are some of the main moves in markets:

Stocks

The S&P 500 fell 0.3%, more than any closing loss since June 3 as of 3:31 p.m. New York timeThe Nasdaq 100 fell 0.1%The Dow Jones Industrial Average fell 0.5%, more than any closing loss since May 18The MSCI World index fell 0.5%, more than any closing loss since May 19

Currencies

The Bloomberg Dollar Spot Index rose 0.7%, more than any closing gain in about a yearThe euro slipped 0.9%, more than any closing loss in more than 14 monthsThe British pound slipped 0.5%, more than any closing loss since May 19The Japanese yen slipped 0.4%, more than any closing loss since June 3

Bonds

The yield on 10-year Treasuries advanced seven basis points, more than any closing gain since May 12Germany’s 10-year yield declined two basis points to -0.25%Britain’s 10-year yield declined two basis points to 0.74%

Commodities

West Texas Intermediate crude fell 0.1% to $72.02 a barrelGold futures fell 0.9%, falling for the fourth straight day, the longest losing streak since April 30

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