US stocks mixed ahead of expected Fed rate hike

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  • US stocks opened mixed on Wednesday ahead of a Federal Reserve policy meeting decision.
  • The Fed is expected to raise interest rates by 50 basis points, which would be the biggest rate hike since 2000.
  • ADP said private employers added 247,000 in April, less than the 395,000 expected.

Shares opened mixed on Wednesday as investors braced for the


Federal Reserve

the largest increase in interest rates in more than 20 years as it battles high inflation for decades.

Wednesday’s main event involves the Fed, which is expected to release its latest policy decision at 2 p.m. ET, followed by a 2:30 p.m. press conference with Chairman Jerome Powell. Fed funds futures priced a 97.9% chance that the central bank would raise interest rates by 50 basis points, or 0.5 percentage points. This would be the largest rate hike since 2000 and would take the Fed’s key rate range to 0.75%-1%.

“The Federal Reserve is in a tough spot right now as it manages the high risks of a


recession

. [Policy makers] want to raise rates high enough and fast enough to rein in inflation, but they don’t want to tip the economy into a recession,” John Leer, chief economist at market research firm Morning Consult, said in a statement. note.

Consumer price inflation accelerated to 8.5% in March, the fastest rise since December 1981.

Here’s where the U.S. indices stood at 9:30 a.m. Wednesday:

The Fed is also expected to outline its plan to shrink its balance sheet, starting with reducing asset purchases by $95 billion a month in June.

“Looking ahead, markets still have a lot of new information to process in the coming days. Even after hearing from Chairman Powell on Wednesday, so much will hinge on the April jobs report released on Friday and the CPI next Wednesday, serious misfires on either front expose markets to further corrections, which in turn could weigh on the real economy,” Leer said.

ADP said Wednesday that private employers in the United States added 247,000 jobs in April, significantly less than the 395,000 expected in a Bloomberg survey of economists. April’s figure reflects slower growth from March and marks the smallest monthly gain since August.

Around the markets, oil prices soared after the European Union unveiled a long-awaited proposal that would phase out imports of Russian crude in six months. The EU decision comes on top of sanctions imposed on Russia for launching a war against Ukraine in late February.

West Texas Intermediate crude gained 4.4% to $106.90 a barrel. Brent, the international benchmark, jumped 4.2% to $109.42.

Elon Musk, who is in the process of buying Twitter, has started telling investors they could likely get cash through a public offering for the company in just three years, according to a Wall report. StreetJournal.

Gold slipped 0.9% to $1,869 an ounce. The 10-year rate rose 2 basis points to 2.98%.

Bitcoin gained 3.7% to $39,033.51.

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