NEW YORK, Sept 20 - A gauge of global equities wavered and shorter-dated Treasury yields edged up on Wednesday after the Federal Reserve projected another rate hike by year end and monetary policy significantly tighter through 2024 than previously expected.
Fed officials now see the personal consumption expenditures price index at 3.3% at year end, up from June's forecast of 3.2%, and its overnight lending rate to be 5.1% at the end of 2024, about 50 basis points higher than futures have projected. The yield on two-year Treasuries , which reflect interest rate expectations, rose 3.5 basis points to 5.144% as the futures priced in the Fed's overnight rate staying above 5% through September 2024 - further out than previously projected.
"Right now the message is we're going to leave rates higher for longer to make sure we slay the inflation dragon. That means less rate cuts in 2024," said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan. Earlier in Europe, the pan-regional STOXX 600 index rose 0.91%. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5% and Japan's Nikkei fell 0.7%.
The yen is down 11% on the dollar this year as expectations firm for U.S. rates to stay high and Japanese rates to stay low, earlier hitting a 10-month trough of 148.17 per dollar.
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