US Stocks Hold Steady After Expectations Rise for the Federal Reserve to Raise Interest Rates
Traders raised the odds of a near-term Federal Reserve hike to almost 60% after Warsh said short-term rates are the central bank’s main tool.
- On Friday, Federal Reserve Chairman Kevin Warsh addressed investors at Jackson Hole, Wyoming, warning that inflation is not meaningfully slowing. The speech boosted rate-hike expectations, causing bond yields to zigzag while U.S. stocks remained steady.
- Persistent uncertainty clouded whether the Federal Reserve would back its rhetoric about hitting the 2% inflation target with actual policy action. Pressure mounted on the central bank to provide clarity on its strategy.
- Warsh stated Friday that "short-term interest rates are the predominant tool" for the Fed. He added, "I would be hard pressed to describe broad financial conditions as restrictive," implying rates may not be high enough to dampen inflation.
- Traders increased the probability of a Federal Reserve rate hike as soon as next month to nearly 60%, up from 35% previously. Two-year Treasury yields jumped to 4.34% from 4.22% immediately after his comments.
- Despite immediate rate-hike expectations, some analysts expect policy will be eased next year as economic growth slows and inflation pressures abate. Markets continue to monitor incoming data to gauge the central bank's future path.
40 Articles
40 Articles
The Northern Virginia Daily
SooLeader.comUS stocks drift after expectations rise for the Fed to hike rates to get inflation under control
U.S. stocks are drifting while expectations rise for the Federal Reserve to hike interest rates soon to get the nation’s high inflation under control. The S&P 500 was flat Friday after flipping between modest gains and losses. The Dow Jones…
Yakima Herald-Republic
US stocks rise with expectations for the Fed to hike rates to get inflation under control
U.S. stocks are ticking higher as expectations rise for the Federal Reserve to hike interest rates soon to get the nation’s high inflation under control. The S&P 500 rose 0.4% Friday. The Dow Jones Industrial Average added 208 points, and…
In his speech, Kevin Worth says he is "impressed by the overall performance" of the world's largest economy, "which appears to have strengthened."
Inflation in America is still too high, and if it remains so, there is work to be done for the FED. That is what the chairman of the US central banks, Kevin Warsh, said in a speech in Jackson Hole. With this, he hints at possible interest rate hikes in the coming months. Economists and analysts on Wall Street had hoped for a clear signal on how the FED intends to tackle inflation. Warsh says that the focus must be on inflation, but he is keepin…
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