US stock market: Dow, S&P 500 close lower as investors take cover ahead of Fed decision
economictimes.indiatimes.comFederal Reserve convened for its much-anticipated two-day monetary policy meeting.
All three indexes ended the session lower in a broad sell-off ahead of the Fed's interest rate announcement on Wednesday, which is expected to culminate in a decision to leave key interest rates unchanged.
«It's a big set up coming into tomorrow and markets are clearly focused on any change in communication from the Federal Reserve,» said Bill Northey, senior investment director at U.S. Bank Wealth Management, Helena Montana, who expects «intense focus on the Fed's perspective on inflation in the post-meeting press conference.»
«Broad inflation readings have shown marked progress over the last year,» Northey added.
«But the last mile of inflation is likely going to be more challenging, bringing it back toward the Federal Reserve's target of 2%.»
The Fed is also due to release its Summary Economic Projections, including its dot plot, which should provide a glimpse into the Federal Open Markets Committee's forecast trajectory of interest rates, inflation and economic growth.
«What's being priced into the market is a pause but increased risk that rates will stay higher for longer,» said Michael Green, chief strategist at Simplify Asset Management in Philadelphia. «If (the Fed) announced that they are removing rate cuts in 2024 by raising the dot plot, it would generally be seen as a very hawkish pause.»
Financial markets have priced in an all-but-certain 99% probability that the central bank will leave its key Fed funds target rate at 5.25%-5.00% on Wednesday, and a growing 70.9% likelihood of standing pat at its next meeting in November, according to CME's FedWatch tool.
On the economic front, a jump in Canada's annual inflation rate due to
