Markets mixed after Fed minutes show “increased likelihood” of rate hikes

Markets were mixed on Wednesday.

The S&P 500 fell 0.6 percent after being up as much as 1.2 percent earlier.

However, the STOXX Europe 600 rose 0.2 percent and the Nikkei 225 rose 0.2 percent.

US stocks were dragged down by rising yields, with the 10-year Treasury yield hitting a four-year peak of 2.95 percent after the minutes of the last Federal Open Market Committee meeting pointed to the “increased likelihood” of more rate hikes ahead.

Some analysts were sanguine about the outlook on inflation though.

“I think for the most part everything in the minutes was fairly benign,” said Bruce McCain, chief investment strategist at Key Private Bank.

“Demographics are such that we have 10,000 people retiring every day and being replaced by younger employees with lower salaries,” said Bruce Bittles, chief investment strategist at Baird, who was doubtful that real inflation was picking up.