CNBC Daily Open: Markets reeled as Fed officials confirmed commitment to high interest rates

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Hawkish Fed officials and higher manufacturing prices gave markets a atrocious commencement to March.

Hawkish sentiment from Federal Reserve officials weighed connected stocks and buoyed Treasury yields, giving markets a disappointing commencement to March.

Minneapolis Federal Reserve President Neel Kashkari said Wednesday he's "open-minded" astir raising involvement rates by either 25 oregon 50 ground points. Kashkari, who is simply a voting subordinate connected the Federal Open Market Committee, added helium mightiness hike rates adjacent further. "I would proceed to propulsion up my argumentation path," helium said. Atlanta Fed President Raphael Bostic said he's comfy with the 5% to 5.25% people projected by the FOMC past twelvemonth – but helium warned rates would request to stay precocious "until good into 2024."

The S&P 500 mislaid 0.47% and the Nasdaq Composite dropped 0.66%. The Dow, however, managed to clasp steady. "We are presently successful the … play betwixt cardinal banks winding down involvement complaint summation cycles and seeing what interaction those increases volition person connected the existent economy," said William Northey, elder concern manager astatine U.S. Bank Wealth Management.

February's ISM Manufacturing Index gave a hint of what that interaction looks like. The speechmaking came successful astatine 47.7%, meaning that the wide manufacturing assemblage contracted successful February — for the 4th consecutive month. Employment successful the assemblage besides dipped. That's bully quality for Fed officials disquieted astir an overheating system and labour market. But the devil's successful the details: The study showed that prices paid by manufacturers accrued from January. Inflation isn't done with the manufacture conscionable yet.

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