Powell hints at return to large interest rate hikes
Markets price in 50 basis points increase
2year German Bund yields at highest since 2008
Traders see volatility on U.S. payrolls, Bank of Japan meeting

LONDON, March 8 Reuters Stocks fell, the dollar hit multimonth highs and U.S. and German shortterm bond yields were parked at their highest levels since at least 2008 as Federal Reserve chair Jerome Powell put big rate hikes back on the table to tame inflation.

Ahead of crucial U.S. jobs data on Friday, MSCI39;s broad index of global stocks fell 0.3.

Futures markets indicated a steady start on Wall Street after the SP 500 index dropped 1.5 on Wednesday. Contracts tracking the SP rose 0.2 and those on the Nasdaq 100 rose 0.3. Europe39;s Stoxx 600 share index traded flat.

MSCI39;s world stock gauge remains about 4 higher for the year, as some investors have held onto robust economic data in the United States and the euro zone as a cause for optimism. This view has clashed with market repricing of interest rate expectations and bond market signals that aggressive monetary tightening raises recession risks.

There39;s a lot of mixed signals out there, said Eren Osman, managing director of wealth management at Arbuthnot Latham, adding he was currently reluctant to take large underweight or overweight positions in any major asset class.

The Fed will likely need to raise interest rates more than previously expected in response to strong progress in the world39;s…