With Hopes for Rate Pause High, Investors Await Fed's Views On Economy

Barry Adams
20 Sep, 2023
New York City

Market indexes diverged as investors awaited interest rate decision later in the day. 

Investors widely anticipate the Federal Reserve to hold rates for the second time at the end of the two-day meeting today. 

The Fed is scheduled to announce its rate decision at 2 p.m. ET and investors will be looking for Fed's projections on economic growth, inflation outlook and jobless rate. 

The Fed's summary of economic projections provides clues about the latest thinking of policymakers and what could impact Fed's decision making. 

Investors are divided about the future rate path and how long interest rates may be needed to stay elevated to bring down inflation to Fed's target rate of 2%.   

Despite multiple rate hikes by the Federal Reserve over the last seventeen months, inflation has stayed above the Fed's target rate because inflation pressures have broadened from commodities and manufactured goods to services and wages. 

The policymakers have little influence over the direction of the commodities prices, like metals and energy, but hold a larger sway on the direction of mortgage rates and borrowing rates for corporations and consumers. 

 

U.S. Indexes & Yields 

The S&P 500 index inched up 0.3% to 4,455.56 and the Nasdaq Composite increased 0.04% to 13,684.31. 

The yield on 2-year Treasury notes hovered near 5.05%, 10-year Treasury notes inched lower to 4.32% and 30-year Treasury bonds edged up to 4.40%. 

Crude oil decreased $0.20 to $90.32 a barrel and natural gas prices declined 13 cents to $2.71 a thermal unit. 

The dollar index edged slightly lower to 104.78, the level last seen in March but higher than the low of 99.85 on July 13. 

 

U.S. Stock Movers 

Instacart declined 4.3% to $32.65 on the second day of trading after the grocery delivery company priced its initial public offering at $30 a share and struggled to hold its early gains on the first day. 

The company sold 30 million shares in the public offering but all shares changed hands on the first day of trading, suggesting that stock may face more headwinds in the next few weeks. 

Pinterest Inc rose 4.3% to $27.34 after the company forecasted annual revenue growth to accelerate following the slowdown in 2022 and 2023.

The company laid out its future plans in its first investor day On Tuesday. 

Coty Inc increased 5.7% to $12.12 after the cosmetic company lifted its full-year 2024 outlook and said comparable sales to grow in the range between 8% and 10% from its previous estimate between 6% and 8%.