Wall Street stocks staged a late rally ahead of the Fed meeting

The action on Wall Street took place late Monday, canceling out previous losses ahead of a two-day US central bank meeting that will be closely watched for clues about the future course of monetary policy.

The Wall Street S&P 500 index ended 0.2% percent higher in New York, having gone on a loss of 0.2 percent less than an hour before the final bell. It marked another high for the index after gaining 0.2 percent on Friday. Nasdaq Composite’s index-focused technology rose 0.7 percent.

The U.S. government’s debt is selling, taking the yield on the U.S. Treasury’s 10-year note up 0.04 percentage points to 1.49 percent. This follows a rally last week in which investors invested in the Federal Reserve seeking high U.S. inflation to maintain its pandemic-era support for financial markets.

The Fed is largely expected to maintain its $ 120 billion monthly bond purchase when it meets Tuesday and Wednesday. These acquisitions of goods, which have been followed by tax regulators in Europe and the UK, have lowered government bond yields, reduced corporate lending costs and increased appeal. of the most risky assets such as stocks.

But then a quick recovery of the Economy of the United States fueled by coronavirus vaccines and President Joe Biden’s maximum stimulus programs, some analysts see Fed policymakers advancing their predictions of the first rise in post-pandemic interest rates.

“We hope the Fed will update its outlook for growth and materially revise its inflation forecast,” said in a research note Tiffany Wilding, U.S. economist at Pimco bond investment house. “We think most Fed officials will also push forward their projections for the first rate hike until 2023 [from 2024]. ”

Title of U.S. consumer price inflation 5 percent in the 12 months to May. Jay Powell, Fed chairman, argued that the rises are a temporary effect of the reopening of the U.S. economy following coronavirus arrests. “But others are worried that inflation is more structural,” said Marco Pirondini, head of U.S. equities at Amundi. “I say it’s 50-50 from everywhere.”

A rise in the prices of used cars and trucks, following a global shortage of semiconductors, has led to a drop in vehicle production, making it about a third of the May CPI increase, according to the Bureau of Labor Statistics.

U.S. wages could also “increase more steadily,” Pirondini said after Biden signed an executive order in late April to increase government pay, pressuring private industry to increase wages as well.

Across the Atlantic, the pan-regional St-Rox Europe 600 gained 0.2 percent to another high, with the energy sector performing better after further rising oil prices.

Brent crude rose up 1.3 percent on Monday to $ 73.64 a barrel, a two-year high for the international oil benchmark, before falling again to end 0.4 percent higher.

The chart of lower index lines showing travel and leisure stocks in the UK charts a wider market

Elsewhere in the region, UK travel and hobby companies have lagged behind the wider market, with a complete reopening of the economy being delayed by four weeks.

The FTSE 350 travel and leisure sector was 1.4 per cent lower compared to a 0.2 per cent increase for the broader FTSE 350 index.

The dollar index, which measures the U.S. currency against its peers, fell 0.1 percent. The euro was up 0.1% against the dollar, including $ 1,212. Sterling flat pound at $ 1,411.

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