Wall Street drops as Fed officials mull U.S. rate hikes in 2023

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FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in the Manhattan borough of New York City, New York, U.S., April 16, 2021. REUTERS/Carlo Allegri/File Photo

June 16, 2021

By David French

(Reuters) – All three main Wall Street indexes fell on Wednesday afternoon, as investors digested news from the Federal Reserve that it expects the first post-pandemic interest rate hikes to be sooner than forecast.

New projections saw most of 11 of 18 U.S. central bank officials pencil in at least two quarter-percentage-point rate increases for 2023, even as officials pledged in a statement to keep policy supportive for now to encourage a jobs recovery.

U.S. Treasury yields also rose on the news, with the benchmark 10-year yield at its highest level in a week. The U.S. dollar also rose, with the dollar index, which tracks the greenback versus a basket of six currencies, hitting its highest level since May 6.

By 3:13 p.m. ET (1913 GMT), the Dow Jones Industrial Average fell 208.69 points, or 0.61%, to 34,090.64, the S&P 500 lost 17.17 points, or 0.40%, to 4,229.42 and the Nasdaq Composite dropped 38.33 points, or 0.27%, to 14,034.52.

(Reporting by Shashank Nayar and Medha Singh in Bengaluru and David French in New York; Editing by David Gregorio, Marguerita Choy and Matthew Lewis)





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