Fed hawkish remarks weigh on global stocks

Minneapolis Fed Chairman Neel Kashkari on Tuesday reiterated the central bank’s commitment to controlling inflation through monetary policy tightening, and said his biggest fear was that continued pressures on prices are underestimated.

Anjali Sundaram | CNBC

LONDON — European markets were muted on Wednesday as further hawkish comments from a U.S. Federal Reserve policy official kept investors hesitant.

The pan-European Stoxx 600 index hovered around the flatline in mid-afternoon trading. Basic resources decreased by 1.7% while household goods added 1.1%.

Minneapolis Fed Chairman Neel Kashkari on Tuesday reiterated the central bank’s commitment to controlling inflation through monetary policy tightening, and said his biggest fear was that continued pressures on prices are underestimated.

The comments came as markets brace for a much-anticipated speech by Fed Chairman Jerome Powell on Friday on the central bank’s tightening path, following his annual economic symposium in Jackson Hole, Wyoming.

Asia-Pacific stocks were mixed on Wednesday after the Dow Jones Industrial Average and S&P 500 posted a third straight day of losses in the previous session. The Chinese component of Shenzhen led the losses regionally.

U.S. stock futures were flat in early premarket trading on Wednesday as Wall Street tried to halt further losses ahead of Powell’s speech on Friday.

Back in Europe, investors will check out the European Central Bank’s minutes of its latest monetary policy talks, which are due out on Wednesday.

After hitting a 20-year low of $0.9901 on Tuesday, the euro rallied slightly overnight to trade at $0.9950 mid-morning in London on Wednesday.

Mary I. Bruner