Wall St slips as higher oil prices, hawkish Fed bets weigh
The main U.S. stock indexes dropped on Monday after military strikes between the United States and Iran drove up oil prices, fanning inflation worries after Fed Chair Kevin Warsh’s hawkish remarks in his first Jackson Hole address the previous week. The losses could set the tone for September, typically a weak month for equities, and are likely to up the ante at the U.S. Federal Reserve’s meeting next month. Traders see a more than 60% chance of a rate hike at the Fed’s September meeting, according to CME’s FedWatch, a sharp increase from 41.4% a week ago, after Warsh said policymakers may need to increase borrowing costs if inflation does not ease to the central bank’s 2% target. “He (Warsh) took any chance of a (rate) cut off the table,” said Thomas Kikis, head of markets, U.S. and Americas, at Standard Chartered. Warsh’s comments, delivered on Friday at the Fed’s Jackson Hole symposium, came after mixed data in recent weeks. A consumer inflation report this month showed price pressures were mild in July, but the Personal Consumption Expenditures reading, the Fed’s preferred gauge, was hotter than expected. The ambiguity could raise the stakes for the monthly U.S. employment repo
Wall St slips as higher oil prices, hawkish Fed bets weigh
The main U.S. stock indexes dropped on Monday after military strikes between the United States and Iran drove up oil prices, fanning inflation worries after Fed Chair Kevin Warsh’s hawkish remarks in his first Jackson Hole address the previous week. The losses could set the tone for September, typically a weak month for equities, and are likely to up the ante at the U.S. Federal Reserve’s meeting next month. Traders see a more than 60% chance of a rate hike at the Fed’s September meeting, according to CME’s FedWatch, a sharp increase from 41.4% a week ago, after Warsh said policymakers may need to increase borrowing costs if inflation does not ease to the central bank’s 2% target. “He (Warsh) took any chance of a (rate) cut off the table,” said Thomas Kikis, head of markets, U.S. and Americas, at Standard Chartered. Warsh’s comments, delivered on Friday at the Fed’s Jackson Hole symposium, came after mixed data in recent weeks. A consumer inflation report this month showed price pressures were mild in July, but the Personal Consumption Expenditures reading, the Fed’s preferred gauge, was hotter than expected. The ambiguity could raise the stakes for the monthly U.S. employment repo
