Markets Await Powell Speech for Hints on Rates

Markets were steady in early trading on Wednesday as investors looked ahead to a speech by Federal Reserve Chair Jerome H. Powell, who is scheduled to make his final public remarks before the central bank meets next month to set interest rates.

The S&P 500 was little changed, after trading lower in the previous three trading sessions. The benchmark index is down about 17 percent since the beginning of the year.

On Wednesday afternoon at the Brookings Institution, Mr. Powell is expected to deliver a speech and answer questions about the outlook for inflation, jobs and the economy, with investors watching closely for hints that Fed policymakers could be about to let up on pace of rate increases. Futures markets imply that traders expect Fed officials to raise rates by half a point at their Dec. 14 meeting, a slower pace than the three-quarter-point increases at each of the past four meetings.

But earlier this week, James Bullard, president of the Federal Reserve Bank of St. Louis, said during an interview with MarketWatch that investors might be overly optimistic about the path of inflation.

The shift in expectations for Fed rate increases has been reflected in government bond yields, which have fallen steeply over the past month. The 10-year yield, which was trading above 4.2 percent a few weeks ago, currently sits at about 3.8 percent.

The prospect for more moderate rate increases has also hit the dollar, which in November is set to lose more than 4 percent of its value against a basket of major currencies, the biggest monthly decline in more than a decade. In part, that reflects how strong the dollar has become as the Fed raised rates aggressively this year. It remains about 10 percent higher against the basket of major currencies than it began the year.

In Europe, the Stoxx 600 index gained 0.6 percent after the latest data on inflation in the eurozone came in lower than many economists expected, stoking the debate over whether the European Central Bank might ease back on the pace of rate increases at its next meeting, on Dec. 15.

In Asia, Hong Kong’s Hang Seng Index rose more than 2 percent and Japan’s Nikkei 225 fell slightly.

Oil prices gained for a third consecutive day, with West Texas Intermediate crude, the U.S. benchmark, rising to around $80 per barrel, a gain of roughly 3 percent.