Stocks traded mixed on Monday as oil prices reached their highest level since November. Brent crude, the international benchmark, hovered near $95 a barrel. The Federal Reserve’s upcoming policy decision is also being closely watched by investors, with expectations that interest rates will remain unchanged. However, market speculation is growing about a potential rate hike in November due to persistent inflation. Traders are giving the November meeting a 31% chance of a 25 basis point increase. The consumer price index rose by 3.7% annually in August, surpassing economists’ expectations. Saira Malik, the chief investment officer of Nuveen, expressed the view that another rate increase is more likely given the inflationary pressures. However, she also stated that a pause in the current hiking cycle is expected by the end of 2023, with rates remaining elevated but stable in 2024.
US stock indexes opened mostly lower on Monday, while Brent crude reached just below $95 a barrel and West Texas Intermediate crude was near $92 a barrel. The Federal Reserve’s policy decision scheduled for this week holds strong significance, as investors await any indications of future interest rate changes. The consumer price index rose by 3.7% in August, surpassing expectations and indicating persistent inflation. The growing likelihood of a rate hike in November has caused market speculation to increase. However, despite inflation being above the Fed’s target, some analysts believe that a pause in the hiking cycle may occur by the end of 2023. Only time will tell what decisions the Federal Reserve will make and their impact on the markets.
Definitions:
– Brent crude: The international benchmark for crude oil prices.
– Federal Reserve: The central banking system of the United States responsible for monetary policy and stability.
– Interest rates: The cost of borrowing money, determined by central banks to control inflation and stimulate economic growth.
– Inflation: The rate at which the general level of prices for goods and services is rising.
Sources:
– Business Insider: [link to original article]