The New York Stock Exchange closed lower on Tuesday as the Federal Reserve (Fed) began its two-day monetary policy meeting which is expected to raise 75 basis points in the rate.
At the end of trading on Tuesday, the Dow Jones Industrial Average fell 1.01% to 30,706.23 points. The NASDAQ Composite technology index fell 0.95% to 11,425.05 points, while the S&P 500 lost 1.13% to end at 3,855.93 points.
Fed officials promised to raise the interest rate to reduce rising inflation.
Market experts indicate that the possibility of increasing yields by 75 basis points is 80%, while 20% says that the interest rate could rise up to 100 basis points this Wednesday.
In any case, observers have already begun to set their sights on a horizon of future increases, waiting for information on what the next movements of the Fed will be and how high the rates will remain.
World stocks fell sharply on Tuesday and the yield on two-year US Treasuries hit nearly 15-year highs.
The Bank of Sweden raised the rate 1 percentage point higher than expected to 1.75% and warned of more hikes in the next six months.
The Fed kicked off its two-day meeting, while the UK, Norway, Switzerland and Japan will also have policy meetings this week.
“The key will be Fed Chairman Jerome Powell’s guidance on what the next possible move is,” said Peter Cardillo of Spartan Capital Securities.
The dollar advanced, trading near two-decade highs, as investors held firm to expectations that a new aggressive rate hike by the Fed.
weight depreciates
The Mexican peso depreciated in the face of a global strengthening of the dollar at the start of a two-day Fed monetary policy meeting, while the Mexican Stock Exchange (BMV) advanced encouraged by the rise of more than 4% in the shares of the telecommunications giant América Móvil.
The exchange rate ended the session at 19.9848 units per dollar, compared to the record of 19.9546 pesos per greenback on Monday, with official data from the Bank of Mexico. This meant a slight loss of 3.02 cents, equivalent to 0.15 percent.
“The Fed is expected to make another 75 basis point increase in the benchmark interest rate,” Monex Casa de Bolsa said in a report. “Investors will also keep a close eye on the dot plot for interest rate projections for the end of this year and next.”
The S&P/BMV IPC, from the BMV, rose 0.59% to 47,068.53 points, posting its third consecutive day of gains, contrary to the performance of most markets abroad.
For its part, the FTSE-BIVA, of the Institutional Stock Exchange, gained 0.77% to 980.99 integers.
The People’s Bank of China kept its benchmark rate unchanged, as expected. Another exception is the Bank of Japan, which is due to meet this week and has shown no signs of abandoning its ultra-loose yield curve policy despite the yen’s sharp decline and inflation accelerating to its fastest pace in eight years.
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