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Markets Await Powell Speech for Hints on Rates


Markets were regular in early trading on Wednesday as investors looked ahead to a speech by Federal Reserve Chair Jerome H. Powell, who’s scheduled to make his final public remarks before the central bank meets next month to set rates of interest.

The S&P 500 was little modified, after trading lower within the previous three trading sessions. The benchmark index is down about 17 percent for the reason that starting of the 12 months.

On Wednesday afternoon on the Brookings Institution, Mr. Powell is predicted to deliver a speech and answer questions on the outlook for inflation, jobs and the economy, with investors watching closely for hints that Fed policymakers may very well be about to let up on pace of rate increases. Futures markets imply that traders expect Fed officials to lift rates by half some extent at their Dec. 14 meeting, a slower pace than the three-quarter-point increases at each of the past 4 meetings.

But earlier this week, James Bullard, president of the Federal Reserve Bank of St. Louis, said during an interview with MarketWatch that investors is perhaps overly optimistic concerning the path of inflation.

The shift in expectations for Fed rate increases has been reflected in government bond yields, which have fallen steeply over the past month. The ten-year yield, which was trading above 4.2 percent a number of weeks ago, currently sits at about 3.8 percent.

The prospect for more moderate rate increases has also hit the dollar, which in November is ready to lose greater than 4 percent of its value against a basket of major currencies, the most important monthly decline in greater than a decade. Partly, that reflects how strong the dollar has change into because the Fed raised rates aggressively this 12 months. It stays about 10 percent higher against the basket of major currencies than it began the 12 months.

In Europe, the Stoxx 600 index gained 0.6 percent after the most recent data on inflation within the eurozone got here in lower than many economists expected, stoking the talk over whether the European Central Bank might ease back on the pace of rate increases at its next meeting, on Dec. 15.

In Asia, Hong Kong’s Hang Seng Index rose greater than 2 percent and Japan’s Nikkei 225 fell barely.

Oil prices gained for a 3rd consecutive day, with West Texas Intermediate crude, the U.S. benchmark, rising to around $80 per barrel, a gain of roughly 3 percent.

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