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US Stocks Lower on Fed Official Remarks06/18 09:24

   Stocks were broadly lower Friday after a Federal Reserve official said that 
the nation's central bank might need to raise interest rates as early as next 
year, sooner than the Fed's latest estimate of possible rate increases in 2023.

   (AP) -- Stocks were broadly lower Friday after a Federal Reserve official 
said that the nation's central bank might need to raise interest rates as early 
as next year, sooner than the Fed's latest estimate of possible rate increases 
in 2023.

   The S&P 500 index fell 0.9% as of 9:50 a.m. Eastern. The Dow Jones 
Industrial Average lost 1.3%, dragged down by technology companies and banks, 
while the Nasdaq Composite was down 0.6%.

   The S&P 500 is on pace to end the week down 1.6% while the Dow is down more 
than 3%. The Nasdaq is still barely positive for the week.

   St. Louis Federal Reserve President James Bullard said on business news 
channel CNBC that he expects the first interest rate increase the Fed could 
make could come as soon as 2022. That's faster than what the Federal Reserve 
said on Wednesday, when a forecast by policymakers put the consensus estimate 
of interest rate hikes in 2023.

   The quickly recovering economy after the pandemic has caused a degree of 
inflation, with prices for basic materials like lumber, copper and oil rising 
as well as other goods like airline tickets and used cars. The general 
consensus is that the inflation will be temporary and is a result of an economy 
recovering from near depression levels, but part of the Fed's mission is to 
keep prices under control.

   The first action the Fed is likely to take would be a slowdown in its $120 
billion of monthly bond purchases, which are helping to keep mortgages cheap, 
but the Fed's chair said such a tapering is still likely "a ways away."

   Higher interest rates would cause high-priced stocks like technology 
companies to be less attractive to investors, and would likely push a greater 
number of investors into securities like bonds for better returns, which would 
come at the expense of the stock market.

   Bond yields were slightly higher after Bullard's comments. The yield on the 
2-year Treasury note rose to 0.25% from 0.23% a day earlier.

 
 
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