Traders work as a television monitor displays Federal Reserve Chair Janet Yellen announcing the Fed’s decision to raise interest rates on the floor of the New York Stock Exchange (NYSE) June 14, 2017 in New York City.
In Jackson Hole, the heads of global central banks convened for the annual Economic Policy Symposium to discuss global monetary policy. Federal Reserve Chair Janet Yellen will deliver a speech on financial stability at 10 a.m. ET, while European Central Bank President Mario Draghi is set to deliver remarks at 3 p.m. ET.
No major policy announcements are expected from the central bankers, but investors will be scrutinizing their comments for any clues on when the Fed or the ECB may decide to raise rates or cut back balance sheets. Market expectations for a rate hike in December are 42.2 percent, according to the CME Group’s FedWatch tool.
Recent weak inflation data may keep central banks from raising rates this year. Earlier this month, the Commerce Department reported that the personal consumption expenditures (PCE) price index, excluding food and energy, rose 0.1 percent in June after a similar gain in May. The core PCE is the Fed’s preferred inflation measure.
Sovereign bonds were flat ahead of the central bank comments. The yield on the 10-year Treasury note ticked lower to 2.190 percent. Bond yields move inversely to prices. The uptick in yields follow months of declines, with the yield on the U.S. 10-year note down about 30 basis points since January.
On the data front, orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, tumbled 6.8 percent last month as bookings for transportation equipment plunged 19 percent. The drop orders was the biggest since August 2014 and followed a 6.4 percent increase in June.