NEW YORK, June 29 (Reuters) – Federal Reserve Chairman Jerome Powell has warned that the US Federal Reserve’s interest rate hike is likely to slow the economy. Very high, but the biggest risk is constant inflation.
The US dollar index was higher and MSCI’s global stock index was lower after Powell’s remarks at the European Central Bank conference. read more
“The clock is ticking on how long you will be in a low inflationary regime. The danger is that you are starting to become a high inflationary regime due to various shocks. It is our job to prevent that. We will prevent that from happening,” Powell said.
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Investors are worried that the central bank’s aggressive drive to reduce inflation will push the economy into recession.
Stan Shipley, Evercore ISI’s sustainable income strategist, said markets will be active as investors and traders study the economic data they want to see.
“We are getting slower economic data. Some sectors seem to be in recession, other sectors are in good shape,” Shipley said.
Yields on 10-year treasury were down 4.9 basis points to 3.158%, while yields for two years were up 0.2 basis points to 3.126%.
Dow Jones Industrial Average (.DJI) 96.69 points, or 0.31%, to 31,043.68, the S&P 500 (.SPX) Lost 1.61 points or 0.04% to 3,819.94 and the Nasdaq joint (.IXIC) Was down 13.17 points, or 0.12%, to 11,168.37.
Pan-European STOXX 600 Index (.STOXX) Lost 0.69% and the volume of shares of MSCI worldwide (.MIWD00000PUS) 0.52% lower.
In foreign exchange, the dollar was up 0.373% and the euro was down 0.39% at $ 1.0477.
Fears of inflation were further fueled by oil prices, which extended their rise to a fourth day. Tight supply concerns offset concerns about a weak global economy. read more
The OPEC + Crude Exporters Group began a two-day meeting on Wednesday, but major policy changes are unlikely, indicating that UAE Energy Minister Suhail al-Masroui is already approaching his country’s potential. read more
US crude recently rose 0.89% to $ 112.76 a barrel and Brent to $ 119.19, up 1.03%.
Spot gold was down 0.2% at $ 1,815.79 an ounce.
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Report by Carolyn Waltkevich; Additional Reporting by Sujatha Rao in London and Herbert Lash in New York; Editing by Nick McPhee, Will Dunham and Alex Richardson
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