Stocks Fall, U.S. Yields Flat As Fed Mulls Ending Bond-Buying Spree

Global equity markets slipped on Thursday (Friday, August 27, 2021, in Manila) while US Treasury yields dipped after reaching two-week highs after two hawkish Federal Reserve officials called for the US central bank to start ending its bond-buying program, Reuters reported.

Photo Insert: The Nasdaq display in Times Square, New York City

Ahead of a speech by Fed Chair Jerome Powell, Dallas Fed President Robert Kaplan said he still believes the Fed in September would announce a plan for tapering to start in October or shortly thereafter.

Earlier, St. Louis Fed President James Bullard said the Fed is "coalescing" around a plan to begin reducing its $120 billion in monthly bond purchases. Powell is due to speak on Friday at the Federal Reserve's annual Jackson Hole, Wyoming, policy symposium, held virtually due to the regional spread of the pandemic.

Following Kaplan and Bullard's comments, benchmark 10-year Treasury note yields reached their highest level since Aug. 12 before retreating to 1.3491%% after US markets closed.

The MSCI world equity index, which tracks shares in 50 countries, was down 0.52%, while the pan-European STOXX 600 index fell 0.32%. Overnight in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.65%.

The Dow Jones Industrial Average fell 0.54% to 35,213.12, the S&P 500 lost 0.58% to 4,469.92 and the Nasdaq Composite dropped 0.64% to 14,945.81. The US dollar jumped from one-week lows after Kaplan and Bullard's comments on bond tapering, pushing the greenback toward a key resistance level.

The dollar index, which measures the greenback against a basket of six major trading currencies, was up 0.259%. Gold prices stabilized after a sharp retreat on Thursday, taking a firmer dollar in stride as investors looked forward to Powell's speech. Spot gold rose 0.03% to $1,791.1547 per ounce. US gold futures gained 0.15% to $1,792.20.

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