Treasury yields continued to climb, with the two-year yield touching its highest level since November 2007, before the financial crisis, according to Tradeweb. “It certainly opens the door to additional big hikes in the future.” “It’s really a split decision in terms of the market as to whether that will be a good thing or a bad thing,” Nixon said of a big rate increase. It showed inflation for the consumer price index got worse in May, instead of slowing as hoped. But a market-bludgeoning report Friday on inflation at the consumer level has seemingly pinned the Fed into getting more aggressive. Investors are now mostly expecting the biggest increase since 1994, a hike of three-quarters of a percentage point, or triple the usual amount.Ī week ago, such a mega-increase was seen as only a remote possibility, if one at all. It could be an indication that wholesale inflation peaked in March, according to Jack Ablin, chief investment officer at Cresset Capital Management.īut economists said the data won’t keep the Federal Reserve from raising its key interest rate on Wednesday by a larger-than-usual amount. Offering some support to the market was a report that showed inflation at the wholesale level was a touch lower in May than expected, though it remains very high. It earlier fell to nearly 70% below its record of $68,990.90 set late last year. Bitcoin was down nearly 5% in afternoon trading and sitting at $22,201, according to CoinDesk. They’ve been among the hardest-hit in this year’s sell-off for markets as the Federal Reserve and other central banks raise interest rates to rein in inflation and forcefully turn off the “easy mode” that helped prop up markets for years. “No one’s going to take meaningful positions today ahead of what could be a rip-roaring day” with the Fed’s announcement, said Katie Nixon, chief investment officer for Northern Trust Wealth Management.Ĭryptocurrency prices continued to swing. A measure of nervousness among investors on Wall Street eased, even as Treasury yields again pierced their highest levels in more than a decade. Stocks fell more than 1% in Tokyo and Paris but rose that much in Shanghai. Despite the swings, trading across markets was still calmer than during Monday’s worldwide rout, which sent the S&P 500 down 3.9%.
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