NEW YORK: Stocks around the world pulled back Tuesday as investors wait to hear from the Federal Reserve, which is beginning a two-day policy meeting on interest rates. Energy stocks had some of the biggest declines, hurt by a continued drop in the price of oil.
The Fed meets over two days starting Tuesday, with traders pricing in a 90 per cent chance of a quarter point rate hike as inflation picks up and the labour market shows solid strength.
The central bank’s statement is due at 2:00pm. ET on Wednesday, which will be followed by Fed Chair Janet Yellen’s press conference.
“Ahead of a major data point like the Fed, you typically don’t see big investors move sharply in one way or the other,” said Adam Sarhan, chief executive officer at 50 Park Investments in Florida.
“Investors are taking a wait-and-see approach, don’t expect any fireworks today.” Wall Street’s top banks were unanimous on the view the Fed would raise rates at its policy meeting, a Reuters poll showed on Friday.
The next big question for the market is whether the Fed signals a more aggressive tightening path than previously expected, especially as markets are betting on a potential economic boost from President Donald Trump’s proposed fiscal policies.
Oil prices fell to three-month lows after Opec reported that crude inventories in developed countries had risen above the five-year average in January despite production cuts by some of the world’s largest exporters.
