- Stocks rose as investors ignored tapering concerns raised in the minutes of the Federal Reserve's most recent meeting. As short-end rates rose, the dollar strengthened and the yield curve flattened.
- Following the release of the minutes, the S&P 500 rose briefly, with real estate and energy stocks leading gains. The Nasdaq 100, which is heavily weighted toward technology, outperformed major benchmarks. Trading volume has been lower than usual in the run-up to the Thanksgiving holiday in the United States.
- The dollar index has risen to its highest level since July 2020. Despite accelerating inflation, data released earlier today showed a resilient US consumer.
- The committee "would not hesitate to take appropriate actions to address inflation pressures," according to the Fed meeting minutes from November 2-3. Since then, inflation has risen to its highest level since 1990, prompting Fed officials to suggest that a faster pace of tapering should be discussed at the December meeting.
- This has caused a rise in treasury yields, with the two-year yield reaching its highest level since early March 2020 and markets bringing forward bets on rate hikes.
- Personal spending in the United States increased more than expected in October from the previous month, while a closely watched inflation measure showed the largest annual increase in three decades. Furthermore, data show that 199,000 people filed initial jobless claims in the week ending November 20, the fewest since 1969, while orders placed with U.S. factories for business equipment rose more than expected in October, indicating solid momentum for capital investment at the start of the fourth quarter.
- Policymakers are now focused on containing inflation, with ultra-loose, the pandemic-era stimulus set to be phased out. At the same time, investors are nervous about the resurgence of COVID-19, particularly in Europe.
- Oil fell slightly the day after US stockpiles increased and the announcement of a coordinated release of crude from strategic reserves.
- The White House announced on Tuesday that a release of 50 million barrels from its reserves in coordination with the US, China, Japan, India, the UK, and South Korea.
