- US stocks fell as Fed officials began their much-talked-about policy meeting on Tuesday.
- All three benchmark indices were slightly down in early trade.
- Markets are pricing in a 99% probability that the central bank will decide to keep interest rates at level.
US stocks fell on Tuesday as investors turned their attention to the start of the Federal Reserve’s two-day policy meeting.
According to the CME FedWatch tool, traders are pricing in a 99% chance that the Fed will choose to keep interest rates at that level this month, up from 92% last week.
Investors are also expecting the significant possibility of another rate hike before the end of the year. Markets have pegged a 29% chance that Fed officials will raise rates by 25 basis-points in November, and a 40% chance that the Fed’s benchmark rate will end the year above its current range of 5.25%-5.50%.
Matthew Morgan, head of fixed income at Jupiter Asset Management, said in a statement: “In recent weeks, the market narrative has shifted from optimism that inflation has been tackled to inflation driven by strong consumer data and improving oil prices. There is a possibility of increase again.” Tuesday “Consumer resiliency has been amazing, and this period of volatility and uncertainty may be with us for some time.”
Prices rose again by 3.7% in August, slightly above the expected rate of 3.6%. The Fed will announce its next rate move at the conclusion of the Federal Open Markets Committee meeting on Wednesday at 2 p.m.
Traders are also nervously keeping an eye on the price of oil, which is continuously moving towards $ 100 per barrel. International oil prices rose above $95 a barrel on Tuesday, raising fears that further rises could disrupt an economic soft landing, which many observers say has become more likely. .
US indices were in this position immediately after the opening bell at 9:30 am on Tuesday:
Here’s what else is happening today:
In commodities, bonds and crypto:
- West Texas Intermediate crude oil is trading 1.5% higher at $92.87 a barrel. International benchmark Brent crude rose 1% to $95.35 a barrel.
- Gold rose 0.12% to $1,955.80 an ounce.
- The yield on 10-year Treasury bonds rose two basis points to 4.341%.
- Bitcoin fell 0.43% to $27,189.