What to do when my Outlook account seems hijacked?

I just received an email that seems to have been sent from my own Outlook account. Blackmail attempt.

I’m using MacBook Apple Mail, and one inbox is for Microsoft Outlook.

Sender email address seems to be my own address.

I was wondering, is it possible that sender email acount can be changed “on the way”. Or does that mean, that my post account has been kidnapped?

Quotation from the mail content text:

I strongly warn you agaіnst the followіng:

  • Do not reply to thіs emaіl. I’ve sent іt from your Mіcrosoft account.
  • Do not contact the polіce. I have access to all your devісes, and as soon as I fіnd out you ran to the cops, vіdeos wіll be publіshed.
  • Don’t try to reset or destroy your devісes. As I mentіoned above: I’m monіtorіng all your actіvіty, so you eіther agree to my terms or the vіdeos are рublіshed.

Just wondering, why shouldn’t I answer to an email that was supposed to have been sent from my own Outlook account.

With Apple Mail program I can check the sender email anddress apart from sender “name”.