The S&P 500 index of major U.S. stocks continued a seven-week decline on Friday to fall 20 percent since January, officially meeting the definition of a bear market. The index hit 3,837 on Friday afternoon, down from a January high of around 4,800 points.

The Dow Jones Industrial Average fell below 30,830, dropping more than 16 percent from its January high of nearly 36,800.

The technology-heavy Nasdaq fell nearly 30 percent to drop below 11,100 off a January peak of more than 15,800 as markets continued to punish Big Tech stocks.

The stock drops have followed a recent interest rate hike by the Federal Reserve of 50 basis points as the U.S. central bank seeks to curb inflation, which is at a 40-year high.

The consumer price index was up on an annual basis 8.3 percent in April off a high of 8.5 percent in March, according to the Department of Labor.

While the core driver of inflation has been supply chain disruptions and demand hikes following private sector shutdowns during the coronavirus pandemic, Republicans have also pointed to the Biden administration’s fiscal stimulus packages as well as negligence on the part of the Federal Reserve.

“Because both the White House and the Fed were in denial and dismissed [inflation] for all of last year, the likelihood of a recession that’s needed to break that inflation cycle is much higher,” House Ways and Means Committee ranking member Kevin Brady (R-Texas) said in a statement last week.

An increasing number of economists are also suggesting that the Fed fell asleep at the wheel and has contributed to a bubble in the stock market.

“Powell’s monetary policy last year gave us an equity bubble, a housing bubble, a credit market bubble. What we see in the last four months is that stock prices have dropped 20 percent. That’s a huge move in a very short space of time, and we might not be finished with this,” Desmond Lachman, an economist with the American Enterprise Institute, a Washington think tank, said in an interview.

“When you get movement of this kind, generally what happens is you find some dead bodies floating around, some hedge fund blows up or some equity fund blows up, so it’s a very fluid kind of situation,” Lachman said.

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