US Futures Retreat as Fed Digs in for Inflation Fight

Wall Street is heading lower ahead of Thursday’s opening bell after the Federal Reserve added another jumbo rate increase and suggested that the pace of rate hikes may slow, but the fight against inflation is far from over. Futures for Wall Street’s benchmark S&P 500 index fell 0.8% and futures for the Dow Jones industrials retreated 0.6%.

Moderna tumbled 11% after saying Thursday that sales from advance purchase agreements for delivery of its vaccine this year will be $18 to $19 billion, as much as $3 billion lower than it projected just three months ago due to supply constraints. Etsy rose more nearly 10% in premarket after beating third-quarter sales forecasts, while eBay jumped more than 6% after it reported strong results.

The Fed on Wednesday raised its short-term lending rate by 0.75 percentage points, three times its usual margin, for a fourth time this year. Its key rate now stands in a range of 3.75% to 4%, the highest in 15 years. Fed Chair Jerome Powell reinforced expectations of more rate hikes by saying “we have a ways to go.” He indicated the level that would be high enough to bring down inflation appears to be higher than it did in September, but gave no target.

The Fed and central banks in Europe and Asia have raised rates aggressively this year to stop inflation that is running at multi-decade highs. Investors worry that might tip the global economy into recession. On Thursday, the Bank of England announced its biggest interest rate increase in three decades. The increase is the Bank of England’s eighth in a row and the biggest since 1992.

U.S. consumer prices rose 6.2% year-over-year earlier in September, the same as the previous month. Core inflation, which excludes volatile food and energy prices to make the trend clearer, accelerated to 5.1% from August’s 4.9%.