- US equity futures rose ahead of the Fed decision, with Dow futures up 129 points (0.3%), S&P 500 futures up 21 points (0.3%) and Nasdaq 100 futures up 145 points (0.5%).
- The FOMC was widely expected to raise rates 25 basis points to a 3.75%-4% range, with investors awaiting Chair Kevin Warsh's framing of whether the move is standalone or the start of a broader tightening cycle.
- Crude fell after an unexpectedly large increase in US inventories, with Brent down 1.2% to $107.47 and WTI down 1.8% to $103.94, though both benchmarks remained above $100 after gaining at least 5% over the prior week.
- Middle East supply disruption drove the oil move: Iran-backed Houthi attacks on Saudi Arabia prompted a shutdown of the kingdom's east-west pipeline and suspension of loadings at Yanbu port.
- Analysts described a feedback loop in which rising oil prices push bond yields higher, weigh on sentiment, and increase pressure on central banks to tighten, with US government bond yields near two-decade highs.
Quotes
“Wall Street found some relief after the recent slide in stocks and bonds as oil prices fell, with traders betting the Federal Reserve will boost rates to fight inflation and defend its credibility.”
“Investors are also awaiting comments from Federal Reserve Chair Kevin Warsh to assess whether the anticipated increase will be a standalone adjustment or the beginning of a broader tightening cycle.”