(Bloomberg) – Stocks fell as Jerome Powell said the Federal Reserve still had “some way to go” to reduce inflation, adding that it was too early to think of a pause in interest rate hikes. may peak at a higher level than previously thought.
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The S&P 500 Index retreated after an initial rally as the Fed chief said a slower rate of rate hike could come as early as December. Technology stocks underperformed. US two-year yields – which are more sensitive to the Fed’s impending moves – fluctuated.
“This is not an environment where the Fed will pivot or signal a pivot,” said Ronald Temple, head of US equity at Lazard Asset Management. “To do so would be negligent and the Fed knows it. In December, the Fed will have two more inflation reports and two more jobs reports. Then perhaps, the FOMC could signal a deceleration in tightening, but not before that.”
The unanimous decision by the Federal Open Market Committee raised the target for the benchmark federal funds rate by 75 basis points to a range of 3.75% to 4%, the highest level since 2008.
Data on Wednesday showed hiring at U.S. companies rose more than expected in October, underscoring labor demand that is likely to recover despite the Fed’s efforts to cool the economy. A strong job market has fueled rapid wage growth, contributed to rapid inflation and pressured the Fed to tighten monetary policy aggressively.
The Treasury paused its longest string of cuts to its quarterly long-term debt sales in about eight years, signaling the end of a historic fiscal deficit reduction period.
In company news, the Boeing executive said the plane maker could generate $10 billion in annual cash by the middle of the decade, once it turns its operations around after years of failures. fail and fail. China has ordered the blockade of the area around Foxconn Technology Group’s main factory in Zhengzhou for seven days, a move that will severely cut shipments in and out of the world’s largest iPhone factory.
This week’s main events:
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Bank of England Rate Decision, Thursday
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US factory orders, durable goods, trade, initial jobless claims, ISM services index, Thursday
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ECB President Christine Lagarde speaks, Thursday
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US Nonfarm Payrolls, Unemployment, Friday
Some key moves in the market:
Inventory
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S&P 500 down 0.7% at 3:11 p.m. New York time
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Nasdaq 100 drops 1.1%
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The Dow Jones Industrial Average was little changed
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MSCI World Index down 0.4%
Currency
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Bloomberg Dollar Spot Index drops 0.2%
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The euro rose 0.1% to $0.9890
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British Pound was little changed at $1.1473
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Japanese yen rose 0.8% to 147.07 a dollar
Electronic money
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Bitcoin up 0.3% to $20,544.29
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Ether is little changed at $1,576.3
Bonds
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Yields on 10-year bonds were little changed at 4.05%
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German 10-year yield rose one basis point to 2.14%
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UK 10-year yield drops 7 basis points to 3.40%
Goods
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West Texas Intermediate crude rose 1.6% to $89.75 per barrel
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Gold futures rose 0.1% to $1,651.80 per ounce
–With support from Lu Wang and Emily Graffeo.
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