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US stocks continued to decline on Wednesday as inflationary signals from recent economic reports overshadowed positive assurances from several Fed officials.
The S&P 500, for example, showed uncertainty for most of the trading session, after US new home sales fell by more than what was forecasted. Apparently, higher prices held back demand, and some data showed that consumer confidence fell for the first time this year. Growing inflation and rising unemployment also restricts improvement in sentiment.
But the Federal Reserve is convinced that price pressures will be short-lived, so they continue to downplay the risk of increasing inflation. Meanwhile, investors are worried about how long the central bank will be able to pursue a soft monetary policy, especially if the economy continues to experience such price pressures.
In the meantime, pay attention to these important events:
- meeting of major US banks with the US House Committee on Financial Services (Wednesday);
- policy meeting of the Bank of Korea (Thursday);
- reports on US jobless claims, 1st quarter GDP, orders for durable goods and pending home sales (Thursday).
S&P 500 futures slipped by more than 0.2% on Wednesday.
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