U.S. Futures Retreat As Fed Digs In For Inflation War

Wall Street is heading lower ahead of Thursday’s opening bell after the Federal Reserve added another jumbo rate increase and suggested that the pace of rate hikes may slow, but the fight against inflation is far from over, Joe McDonald and Matt Ott reported for the Associated Press (AP).

Photo Insert: Fed Chair Jerome Powell reinforced expectations of more rate hikes by saying “we have a ways to go.”

The Fed on Wednesday raised its short-term lending rate by 0.75 percentage points, three times its usual margin, the fourth time it has done so this year. Its key rate now stands in a range of 3.75% to 4%, the highest in 15 years.

Fed Chair Jerome Powell reinforced expectations of more rate hikes by saying “we have a ways to go.” He indicated the level that would be high enough to bring down inflation appears to be higher than it did in September, but gave no target.

In midday trading, the FTSE 100 in London lost 0.7%, the DAX in Frankfurt declined 1% and the CAC 40 in Paris sank 0.7%.

In Asia, the Hang Seng in Hong Kong fell 3.1% to 15,369.72, giving up much of the previous day’s gains after the Chinese government failed to confirm a rumor on social media that Beijing might start easing anti-virus controls that have disrupted business.

The Shanghai Composite Index fell 0.2% to 2,997.80 and Sydney’s S&P-ASX 200 sank 1.8% to 6,857.90. Japanese markets were closed for a holiday. Kospi in Seoul rose 0.3% to 2,329.17. India’s Sensex lost 0.4% to 60,692.09. New Zealand and most Southeast Asian markets also fell.

In energy markets, benchmark US crude lost $1.40 to $88.60 per barrel in electronic trading on the New York Mercantile Exchange.

The contract rose $1.63 to $90 on Wednesday. Brent crude, the price basis for international oil trading, shed $1.29 to $94.87 per barrel in London. It rose $1.51 the previous session to $96.16 a barrel.

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