(Bloomberg) — Stocks sank as Federal Reserve officials stressed that more rate hikes are coming, with risk appetite also hit by uncertainties around China’s Covid curbs and their impact on the global economy.
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The S&P 500 pared its monthly gain as Fed Bank of St. Louis President James Bullard said markets may be underestimating the chances of higher rates while his New York counterpart John Williams noted policymakers have more work to do to curb inflation. Fed Vice Chair Lael Brainard said the string of supply shocks is keeping inflation risks elevated.
Investors are now looking ahead to Jerome Powell’s speech Wednesday, with many economists expecting he’ll cement bets that the Fed will slow its pace of rate increases next month — while reminding Americans that its fight against inflation will run into 2023.
“We expect Powell will push back more narrowly on market bets on…