Bond Market Prepares for Rate Hike Amid US Stock Slump

The bond market is bracing for a potential hike in interest rates as investors bet that the Federal Reserve will take action to combat high inflation.

This move has caused some volatility in US stocks, with the S&P 500 falling 0.2% and the Nasdaq composite slipping 0.5%, while the Dow Jones Industrial Average dipped by just 9 points or less than 0.1%

Economists believe that a speech by Federal Reserve Chairman Kevin Warsh helped strengthen faith in the Fed's ability to bring down inflation, even if it causes short-term economic pain.