FTSE 100 Live: US inflation figure due as rate rise worries continue

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Crisis session for investors today as May releases US inflation data, which, if above last month’s 8.3%, will raise fears of interest rate hikes in the future.

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The US Federal Reserve is expected to raise rates by 0.5% next week and already in July, but the outlook for autumn depends on a easing of inflationary pressures.

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Oil prices above $120 a barrel The panic of an average rate hike has intensified ahead of this afternoon’s inflation release, with the FTSE 100 index down 1.5% and the S&P 500 down 2.4% yesterday.

live update

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FTSE 100 drops ahead of US inflation data

All eyes are on this afternoon’s US inflation release, which is expected to remain unchanged for May at 8.3%.

Growth above this is unlikely to be well received by the stock markets, especially with the US Federal Reserve meeting next week.

Fears of an interest rate hike have intensified in recent days as oil prices rose above $120 a barrel.

The FTSE 100 index fell 1.5% yesterday and is set to lose another 56 points at 7,420 this morning, leaving it for its worst week this year. The S&P 500 also fell 2.4% last night.

Michael Hewson, Chief Market Analyst at CMC Markets, said: “Up until a week ago there was some optimism that we may be hitting a peak as far as US inflation is concerned.

“This sentiment has taken a knock over the past few days, as reflected by a sharp rebound in yields, as central banks around the world begin a series of external rate hikes.

US 10-year bond yields are now above 3% on hopes that the Federal Reserve will continue to raise rates next week and in July after an estimated 0.5% hike.

Yesterday the European Central Bank decided to end its asset purchase plan in three weeks and raise interest rates next month, for the first time since 2011.

Credit: www.standard.co.uk /

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