-
U.S. stocks traded mixed as investors looked ahead to the minutes of the central bank meeting.
-
The publication will provide more insight into what the Fed thinks about monetary policy and inflation.
-
Traders expect a quarter-point interest rate cut in November.
U.S. stocks were mixed early on Wednesday as traders looked ahead to the minutes of the Federal Reserve’s latest policy meeting, which should provide further clues about the path of interest rates for the rest of the year.
All three benchmark indices were slightly in the red, while bond yields rose slightly.
Investors will review the final minutes of the Fed meeting later on Wednesday, which will provide more insight into what central bankers think about the economy and the trajectory of rate cuts this year and beyond. Monetary policy is in focus after an unexpectedly positive jobs report in September, raising doubts about whether the Fed will make another major rate cut this year.
“The minutes of the Federal Reserve’s latest meeting are ready and should be fascinating,” Paul Donovan, chief economist at UBS Global Wealth Management, said in a note. “The tone of the Fed minutes should not change expectations of further rate cuts – the Fed is still trying to catch up with declining inflation in the US and has been late in cutting rates. But expectations about the pace of easing can be determined by the minutes. .”
According to Pantheon Macroeconomics, the Fed is more likely to cut rates in steps of 25 basis points than to implement another 50 basis point rate cut.
“Yet, we still think the FOMC is placing undue emphasis on the current strength of the economy, rather than on the direction in which policy is moving and on the delayed impact of previous tightenings still in the pipeline,” said economists at the research agency in a note. “We expect an easing of 25 basis points in November, but think weak jobs and activity data in the fourth and first quarters will quickly leave the Fed scrambling to avoid falling behind the curve.”
Central bankers will review another jobs report and the September consumer price index, due Thursday morning, before making their next interest rate move.
The inflation report will be a key data point for the Fed after September’s big payrolls report, with markets worried that officials will have to turn their attention back to prices after focusing on the labor market at their last meeting.
Markets are pricing in an 88% chance that the Fed will make a quarter-point cut, while the chance of another major cut has been completely reduced, the US central bank said. CME FedWatch tool.
Google parent company Alphabet fell 1% in early trading, the U.S. Department of Justice said indicated that it could break up the technology giant.
Here’s where US indexes stood shortly after the 9:30 a.m. opening bell on Wednesday:
Here’s what else is going on:
In commodities, bonds and crypto:
-
West Texas average Crude oil fell 2% to $72.06 a barrel. Brent crude oilthe international benchmark, fell 2% to $75.63 per barrel.
-
Gold fell 0.39% to $2,612.00 an ounce.
-
The interest rate on ten-year government bonds remained virtually stable at 4.041%.
-
Bitcoin fell 0.8% to trade at $61,930.
Read the original article Business insider
