Fed risk drubs stocks; dollar, bond yields soar
NEW YORK, June 14 (Reuters) – World stocks fell for a second day in a row on Tuesday while government bond yields and the U.S. dollar clung to multi-year highs, as surging inflation led investors to brace for what could be the largest U.S. interest rate hike in 28 years this week.
Surprisingly strong U.S. inflation data released Friday has fueled bets that the Federal Reserve must tighten monetary policy more aggressively to tame soaring prices. Fears that a steady series of rate rises could cause a recession walloped global equities on Monday.
Investors are betting with near certainty that the Fed will announce a 75-basis-point rate increase – the largest since November 1994 – at the end of its two-day policy meeting on Wednesday. It would be this year’s third rate increase following two 50-basis-point hikes. read more
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“A 75-basis-point increase is more consistent with the…
