US stock indices were slightly lower this morning as investors await the release of minutes from the Federal Reserve’s October 28-29 meeting, due at 2 p.m. today.
Thursday, November 20, 2014
The S&P 500, Dow and Nasdaq each dropped 0.2% at Wednesday’s open.
“Every nuance will be pored over, but the basic question is whether the [Federal Open Market Committee] will vote for rate hikes as long as the economic recovery continues, or only if signs of inflation appear?” Kit Juckes, global macro strategist at Société Générale, told MarketWatch.
Details to provide context
Investors will look to the latest Fed minutes as a way to gain perspective on the policy board’s October decision-making and to determine what lies ahead, according to The Wall Street Journal. Primarily, economists are interested in the exact timing of the next interest rate hike, widely expected to come sometime in 2015. Previous language from the Fed may have indicated an internal debate about whether or not the economy is strong enough to warrant an early rate increase.
The October meeting also saw the end of the Fed’s third round of quantitative easing. That was no surprise for most, but the upcoming minutes could reveal the exact level of support for that measure. One board member is known to have objected to the end of quantitative easing, but other, non-voting officials might have supported his stance.
Additionally, economic conditions worldwide have been volatile and largely disappointing. Since the October meeting, Japan has fallen into a recession while Europe continued its torpid growth. The US market was also turbulent, which may have influenced the Fed’s decisions at the end of October.
Investors will likely pore over the minutes to find any hint at the interest rate increase, while other data could also impact the performance of US indices today.
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