NEW YORK, Aug 29 — US stock indexes were set to open lower today on worries over the Federal Reserve's plan to keep raising interest rates in its fight against inflation even at the cost of an economic slowdown.
Money market traders are pricing in a 64.5 per cent chance of a third straight 75-basis-point interest rate hike in September and expect the Fed funds rate to end the year around 3.7 per cent. "The market is a trader's paradise right now ... the economic backdrop has to prove a reason to be optimistic. Until then the traders are just going to vacillate between optimism and pessimism based upon what the Fed says."
At 08:23 a.m. ET, Dow e-minis were down 256 points, or 0.79 per cent, S&P 500 e-minis were down 35.75 points, or 0.88 per cent, and Nasdaq 100 e-minis were down 136.5 points, or 1.08 per cent.