Stocks slump as Powell signals interest rates will stay high for some time

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U.S. Federal Reserve Chair Jerome Powell reiterated that another \u0027unusually large\u0027 hike could be appropriate next month. Read more

Investors are rushing out of stocks and bonds alike as they worry about the economic risks from the Fed pressing on with rate hikes, according to Bank of America Corp. strategists.

Global equity funds had outflows of US$5.1 billion in the week through Aug. 24, with U.S. stocks seeing their first redemptions in three weeks, according to a note from the bank, citing EPFR Global data. Rate-sensitive technology funds posted their largest exodus since November 2021, while high-yield bonds led redemptions of US$800 million from global bond funds. About US$600 million left gold, the data show.

Data Friday showed consumer spending rose less than expected as a key inflation metric turned negative. U.S. consumer sentiment rose more than expected in August as year-ahead inflation expectations eased, suggesting Americans are growing more optimistic as gas prices continue to drop.The S&P 500 fell 2.2 per cent as of 12:17 p.m. New York timeThe MSCI World index fell 1.6 per centThe euro rose 0.2 per cent to US$0.9997The Japanese yen fell 0.4 per cent to 137.

 

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