Wall Street's main indexes slipped on Tuesday as investors assessed odds of an interest rate pause by the Federal Reserve at its policy meeting next week, with mixed economic data adding to uncertainty around the rate path.
, pushing a measure of prices paid by businesses for inputs to a three-year low.
While that signaled the Fed's monetary tightening was cooling the world's largest economy, it followed strong monthly jobs data last week, clouding the outlook for the Fed's policy. "The difference between skip and pause and it's impact on the next meeting is what investors are kind of wrestling with," said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest.Inflation data due next week is expected to show consumer prices cooled slightly on a month-over-month basis in May but core prices are expected to have remained elevated.
Some Fed officials last week backed the view that the central bank could keep rates steady at its June 13-14 meeting and look for more signs of whether the economy was cooling or higher rates were warranted. The Fed officials have entered a "blackout" period. Fed fund futures indicate traders have priced in a 75% chance that the central bank will hold interest rates in the 5%-5.25% range, according to CMEGroup's Fedwatch tool. However, they see 50% odds of another 25-basis-point rate hike in July.
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