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U.S. government bond prices softened and Wall Street shares were not building on the high levels reached last week as traders became cautious ahead of a two-day U.S. central bank meeting on Tuesday.
A after rally last week investors held the Federal Reserve to support the pandemic-era financial markets in the face of high US inflation, with the benchmark 10-year Treasury bond yield rising 0.02 percentage points to 1,485 percent.
The S&P 500 stock index on Wall Street fell 0.3% in early New York trading after hitting another record on Friday. The technology-based Nasdaq Composite index rose 0.1%. The Stoxx Europe 600 also gained 0.1 percent to achieve a new high close.
The Fed is expected to maintain $ 120 billion in monthly bond purchases that have eased financial conditions for businesses and homes since March last year.
Following these asset purchases, after fixing rates in Europe and the UK, yields on government bonds have fallen, corporate borrowing costs have been reduced and the attractiveness of risky assets such as assets has been strengthened.
However, after a rapid recovery in the U.S. economy fueled by coronary vaccines and massive stimulus programs by President Joe Biden, some analysts have seen Fed politicians present predictions about a rise in the first interest rate after the pandemic.
“We expect the Fed to renew its growth forecasts and materially revise its inflation forecast,” Tiffany Wilding, a U.S. economist at Pimco bond investment home, said in a research note. “We believe that most of the Faith officials will also move forward with expectations of raising the first rate by 2023 [from 2024]”.
Faith Vice President Richard Clarida last month call For a discussion on reducing the purchases of US central bank assets recovery hurry up.
“We expect more discussion on the future of tapering,” said Grace Peters, an investment strategist at JPMorgan’s private bank. “To start with real tapas early next year.”
The developed and emerging market share index FTSE Worldwide has been hovering around the highest level in its history over the weeks as investors wait and watch for a longer-term view of monetary policy.
US consumer price inflation has been a success 5 percent in the 12 months to May. Fed Chairman Jay Powell has maintained that the increases are a temporary impact on the reopening of the U.S. economy after the closure of coronaviruses. “But others are concerned that inflation is more structural,” said Marco Pirondini, head of U.S. stocks at Amundi. “I’d say it’s 50-50 from side to side.”
The rise in the price of used cars and trucks, followed by a global shortage of semiconductors in declining production of new vehicles, accounted for a third of the May CPI increase, according to the Bureau of Labor Statistics.
U.S. wages could also “rise more sustainably,” Pirondini said after Biden signed an executive order to increase government wages in late April, putting pressure on private industry to raise wages.
The dollar index, which measures the U.S. currency with its trading partners, has fallen 0.1 percent. The euro rose 0.2 percent against the dollar, buying $ 1,212. The pound rose 0.1 percent to $ 1,411. The dollar index has gained 0.7 percent this year, and foreign exchange traders are waiting for a clearer picture of the future path of U.S. monetary policy.
Crude Brent, an international oil benchmark, gained 1 percent to $ 73.39 a barrel.
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