Fed leaves rates unchanged, says inflation continues to run below 2%
Stock futures indicated a mixed start for U.S. stocks early Thursday after the Federal Reserve kept rates unchanged at 0-0.25 percent and maintained the current pace of at least $120 billion on monthly asset purchases, following the conclusion of its meeting on Wednesday.
Fed policymakers are now predicting that consumer prices will increase, at least temporarily, as life slowly returns to normal and people spend their stimulus money. The central bank now expects inflation to hit 2.4% this year, compared with its earlier estimate of 1.8%.
“Indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak. Inflation continues to run below 2%,” the FOMC said in its policy statement.
By 5:40 a.m. ET, the blue-chip Dow futures inched 31 points, or 0.09% higher to 32,935. S&P 500 futures dropped 16.38 points, or 0.41% to 3,947.12 while the tech-heavy Nasdaq 100 futures were down 150.12 points, or 1.14% to 13,038.88.
Meanwhile, the yield on the 10-year U.S. Treasury bond ticked up 1.74% in overnight trading while the yield on the 30-year Treasury bond jumped 2.483%.
The Bank of England is also expected to keep interest rates unchanged when it publishes its monetary policy decision at 8 a.m. ET.
Jobless claims; Nike earnings on tap
On the data front, the U.S. Labor Department will publish its weekly report on initial jobless claims at 8:30 a.m. ET.
Economists expect the data to show that over 700,000 Americans filed first-time applications for state unemployment benefits in the week ended March 13. That compares to the 712,000 claims filed the prior week.
Continuing claims are seen coming in at 4.034 million, down from 4.144 million during the prior week.
Meanwhile, Nike (NYSE: NKE), FedEx (NYSE: FDX), Accenture (NYSE: ACN), and Dollar General (NYSE: DG) are among notable companies that will report quarterly earnings today.
Crude falls on IEA’s assessment
In commodities, crude futures tumbled Thursday morning after the International Energy Agency said on Wednesday that global oil demand will not return to pre-pandemic levels until 2023.
The agency added that growth will be subdued thereafter amid a shift away from fossil fuels and new working habits.
“Oil demand will likely never catch up with its pre-pandemic trajectory. There may be no return to ‘normal’ for the oil market in the post-Covid era,” the Paris-based IEA said in its report.
As of 5:30 a.m. ET, U.S West Texas Intermediate (WTI) crude futures were at $67.42, down 58 cents, or 0.85% a barrel. Global Brent crude futures were down 57 cents, or 0.88% to $64.03 a barrel.
