U.S. futures slide as global rate-hike wagers surge

U.S. equity-index futures fell with Treasuries after a chorus of Federal Reserve officials reiterated their resolve to continue rate hikes and traders raised tightening wagers for other major central banks.

September contracts on the S&P 500 Index fell 0.7 per cent after Thursday’s gains put the equity benchmark on course for the longest streak of weekly gains since November. Technology shares remained the weaker link, with Nasdaq 100 futures falling 1 per cent Friday. The two-year Treasury yield advanced 5 basis points. The dollar headed for the biggest weekly rally since June 10. Bed Bath & Beyond sank 42 per cent in New York premarket trading after a major investor sold his stake.

Two voting members of the Federal Open Market Committee -- St. Louis’s James Bullard and Kansas City’s Esther George -- emphasized that the US central bank will continue to raise interest rates until inflation eased back to its 2 per cent target. While their views released Thursday diverged on the quantum of the Fed’s September move, they quelled expectations that a string of weak economic data will encourage the Fed into a dovish pivot.

“It is patently clear that the Fed has inflation reduction as its main aim, even though it acknowledges the knock-on risk of derailing the economy,” Richard Hunter, the head of markets at Interactive Investor International in Leeds, UK, said. “Comments from several Fed officials suggest that there remains some way to go before victory can be declared on taming inflation.”