In early trading on Monday, stocks were mixed as investors
braced for a two-day meeting of the Federal Reserve this week where it’s
expected the central bank will hike interest rates sharply to contain
inflation.

The S&P 500 index was 6.19 points or 0.16% down at
3,955.44, while the Dow Jones Industrial Average was 9.29 points up or 0.02% up
at 31,908.58. The technology-heavy Nasdaq Composite was 72.60 points or 0.61% down at 11,761.52.

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On Wednesday, most economists expect the Fed to announce
its second 0.75% point hike in its short-term rate in a row, a sharp hike that
it hasn’t otherwise implemented since 1994. The hike will put the Fed’s
benchmark rate at a rate of 2.25% to 2.5%, the highest since 2018.

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The US economy is slowing, but strong hiring shows it is
not yet in recession, Treasury Secretary Janet Yellen said on NBC’s “Meet
the Press” on Sunday. She spoke ahead of the release this week of a series
of economic reports that will put light on an economy currently caught by
soaring inflation as interest rates rise.

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According to some early signs, inflation may be cooling
down from red-hot levels. Auto club AAA said on its website as of Monday that
the average price of a gallon of regular gas is $4.36 per gallon. That’s 16
cents cheap from a week ago, and down 55 cents than late June. The average
price stood at $4.91 per gallon. Crude oil prices have fallen nearly 10% this
month alone. 

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Apart from the Fed meeting, the Commerce Department on
Sunday will release its first estimate of the economy’s output in the
April-June quarter. Some economists forecast it may show a contraction for the
second quarter in a row. The economy contracted 1.6% in the January-March
quarter. Two straight negative reports are informally considered a recession.

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Technology heavyweights like Apple, Meta, Microsoft, and
Amazon will release their results later this week. Other big companies
releasing this week include Coca-Cola and McDonald’s, where investors may look
to see the impact of inflation on these inflation-conscious, consumer-facing
companies.