According to ctvnews:
TOKYO –
Stocks are opening broadly lower on Wall Street and Treasury yields are rising ahead of a key decision on interest rates by the U.S. Federal Reserve. The S&P 500 index was off 1.2% in the early going Tuesday. The Nasdaq composite and the Dow Jones Industrial Average were also lower. Every sector in the stock market was lower as traders wait to see how far the Fed will raise interest rates at its meeting that ends Wednesday. The Fed is raising the cost of borrowing money in hopes of slowing down the hottest inflation in four decades. Crude oil prices fell.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
U.S. futures veered lower Tuesday ahead of what is expected to be another substantial interest rate hike from the Federal Reserve this week.
Futures for the Dow Jones industrials slipped 0.4% while futures for the S&P 500 fell 0.5%.
Markets have been jittery over whether the Fed’s plan to cool the hottest U.S. inflation in four decades may go too far and cause the U.S. economy to shrink.
Federal Reserve Chair Jerome Powell bluntly warned in a speech last month that the Fed’s drive to curb inflation by aggressively raising interest rates would “bring some pain.” On Wednesday, Americans may get a better sense of how much pain could be in store.
The Fed is expected to raise its key short-term rate by a substantial three-quarters of a point for the third time this week. Another hike that large would lift its benchmark rate — which affects many consumer and business loans — to a range of 3% to 3.25%, the highest level in 14 years, and up from zero at the start of the year.
The Fed’s two-day meeting starts Tuesday.
The U.S. is not isolated in it’s campaign to slow a red-hot economy through rate hikes.
Sweden’s central bank on Tuesday raised its key interest rate by a full percentage point to 1.75% catching almost everyone off guard as it scrambles to bring down inflation that was measured at 9% in August. The country’s central bank, the Riksbanken, said the policy would be in place for six months. Norway’s central bank raised its key policy interest rate by half a percentage point last month.
Consumer inflation in Japan jumped in August to 3%, its highest level since November 1991 but well below the 8% plus readings in the U.S. and Europe. The Bank of Japan is set to have a two-day monetary policy meeting later this week, although analysts expect the central bank to stick to its easy monetary policy.
Min Joo Kang, senior economist, South Korea and Japan, at ING Economics noted inflation remained relatively low in Japan, with energy prices rising, for instance, but not as much as in the U.S. or some parts of Europe. Housing prices haven’t risen and household income have remained stagnant.
Rate decisions from Norway, Switzerland and the Bank of England are next.
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