Markets were steady in early trade on Wednesday as investors awaited a speech from Federal Reserve Chair Jerome H. Powell, who is expected to make his final public comments before the central bank meets next month to review the set interest rates.
The S&P 500 is little changed after trading lower for the previous three trading sessions. Since the beginning of the year, the leading index has fallen by around 17 percent.
On Wednesday afternoon at the Brookings Institution, Mr. Powell is expected to speak and answer questions about the outlook for inflation, jobs and the economy, with investors watching closely for signs that Fed policymakers are about to ease the pace of rising interest rates. Futures markets are implying that traders expect Fed officials to hike rates by half a point at their Dec. 14 meeting, a slower pace than three-quarter-point hikes at each of the past four meetings.
But earlier this week, during an interview with MarketWatch, James Bullard, President of the Federal Reserve Bank of St. Louis, said investors may be overly optimistic about the inflation trajectory.
The shift in expectations for rate hikes by the Fed is reflected in government bond yields, which have fallen sharply over the past month. The 10-year yield, which traded above 4.2 percent a few weeks ago, is currently around 3.8 percent.
The prospect of more moderate rate hikes has also hit the dollar, which is set to lose more than 4 percent of its value against a basket of major currencies in November, the biggest monthly decline in more than a decade. In part, this reflects how strong the dollar has grown as the Fed has aggressively hiked interest rates this year. Against the basket of major currencies, it remains about 10 percent higher than at the beginning of the year.
In Europe, the Stoxx 600 index rose 0.6 percent after the latest data on euro-zone inflation came in lower than many economists had expected, fueling debate over whether the European Central Bank will slow the pace of interest rate hikes at its next meeting could decrease. on December 15th.
In Asia, Hong Kong’s Hang Seng index rose more than 2 percent and Japan’s Nikkei 225 fell slightly.
Oil prices rose for the third straight day, with West Texas Intermediate Crude, the US benchmark, rising to about $80 a barrel, up about 3 percent.
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