The US stock exchanges are likely to start trading with significant discounts on Wednesday after the strong recovery of the previous day. The futures on the S&P 500 are down 1.6 percent pre-market. The highly volatile ups and downs on Wall Street are therefore likely to continue.
High inflation and the US Federal Reserve’s rapid turnaround in interest rates are fueling fears of the economy slipping into recession. The focus of market participants is therefore the hearing of US Federal Reserve Chairman Jerome Powell before the Senate Banking Committee in the afternoon (3:30 p.m. CEST). Investors are hoping for information about the Fed’s interest rates in the fight against high inflation. The US Federal Reserve had raised interest rates sharply last week by 75 basis points to a range of 1.50 to 1.75 percent.
Richmond Fed President Thomas Barkin, meanwhile, has his support for a rate hike signaled another 50 to 75 basis points in July. Such a rate hike feels “pretty sensible,” Barkin said. Barkin described inflation as “high, broad-based and persistent”.
It doesn’t look as if the Fed will let the S&P 500 Index’s 21 percent decline since the start of the year deter them; The analysts at ING comment that their current rhetoric is that the US economy can cope with higher interest rates.
On the economic side, API data on US crude stockpiles will only be released after US trading closes.
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DJG/DJN/err/cln
(END) Dow Jones Newswires
June 22, 2022 06:07 ET (10:07 GMT)
