Bonds & Stocks
Stocks lost steam on the eve of a massive expiration of options on Wall Street, while Treasury yields dropped on speculation the Federal Reserve remains on a path toward lower interest rates. The S&P 500 fell 0.7%. The Nasdaq 100 slid 0.9%. The Dow Jones Industrial Average lost 0.6%. The yield on 10-year Treasuries declined seven basis points to 4.17%.
Economy
Federal Reserve Chair Jerome Powell downplayed growth concerns and the impact of President Donald Trump's trade war on inflation, calling the inflationary effect of tariffs "transitory". Powell's comments, along with median forecasts showing two rate cuts this year, should help alleviate worries that inflationary pressures will prevent the central bank from lowering rates if the economy weakens.
World
The Bank of England held policy steady, with the Monetary Policy Committee voting 8 to 1 in favor of leaving the benchmark policy rate at 4.5%. The BOE reiterated its guidance for "gradual and careful" loosening, but the minutes also said there was "no presumption that monetary policy was on a pre-set path over the next few meetings."