Market Extra: ‘The Fed is going to overdo it’: Financial markets finally react to U.S. central bank’

Alex Wong/Getty ImagesFinancial markets finally absorbed the Federal Reserve’s stridently hawkish interest-rate outlook for 2023, weighing the prospects of a 5%-plus level in borrowing costs in the new year against fresh signs of a weakening U.S. economy. A bigger-than-expected drop in November’s retail sales plus weak regional manufacturing data this week added to the growing impression that the world’s largest economy is about to tip into a recession in 2023. U.S. stocks booked...