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Stocks fell and bond yields jumped after the Fed’s Christopher Waller cited a slow Fed pivot.
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“I believe it can and should be lowered methodically and carefully,” he said in a speech.
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Strong bank earnings helped lifted up Goldman Sachs shares, while Boeing and Apple slid.
Stocks fell Tuesday as investors readjusted their expectations of imminent interest rate cuts following comments from a key central bank official.
The 10-year Treasury yield returned to 4% levels, as Federal Reserve Governor Christopher Waller outlined that the central bank would likely cut rates at a slower pace than markets are anticipating.
“When the time is right to begin lowering rates, I believe it can and should be lowered methodically and carefully,” he said in a speech at the Brookings Institution.
The 10-year Treasury yield jumped 10 basis points Tuesday to 4.058%.
His remarks followed similar caution from other central bankers, with officials speaking at the World Economic Forum in Davos, Switzerland. Market expectations of a rate cut in March have since climbed lower, with futures now indicating a 65%.
Fed policy may be further informed by Wednesday’s retail sales data, and signal whether consumer spending strength continues to hold up.
Among individual equities, strong bank earnings lifted up Goldman Sachs. Meanwhile, Boeing continued to tumble since the grounding of its Max 757, while Apple’s share price after the Supreme Court ruled against it on app store policy.
Here’s where US indexes stood at the 4:00 p.m. closing bell on Tuesday:
Here’s what else is going on:
In commodities, bonds, and crypto:
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