On Monday, there was little change in the world stock markets and benchmark US bond yields also fell from 13-month highs, as investors turned their attention towards the meeting of the US central bank later in the week after a massive coronavirus relief bill was passed by the US government. There was a 0.01% increase in the MSCI’s gauge of stocks around the world. The main indexes on Wall Street remained mixed in early trade after record highs were achieved last week by the benchmark S&P 500. As far as European shares are concerned, they reached pre-pandemic levels, with travel shares experiencing a boost in both regions.

The two-day policy meeting of the Federal Reserve that will end on Wednesday is now in focus with concerns about an increase in inflation and a rise in bond yields. This week, Fed policymakers are expected to forecast that the growth of the US economy in 2021 will be the fastest rate seen in decades. Market analysts said that there was still some bias towards rapid economic growth, but it still remained quite tentative. It will continue to stay that way until Wednesday when the Fed meeting comes to an end and they make a statement about the economy.

As far as Wall Street is concerned, there was a 0.01% in the Dow Jones Industrial Average, which is about 3.89 points, as it hit 32,774.75. There was a gain in the S&P 500 by 0.09 points, as it reached 3,943.43 whereas the Nasdaq Composite experienced an increase of 0.38%, which is about 51.27 points and it took it to 13,371.14. There was also an increase in airline shares as the companies pointed to clear signs of a recovery in the industry, as leisure bookings saw a boost with a slowing COVID-19 pandemic. A 0.12% increase was also seen in the pan-European STOXX 600 index.

The index reached its highest level since February last year, primarily driven by travel stocks. Last week, a $1.9 trillion stimulus bill was signed into law by US President Joe Biden and it is expected to improve economic data. Gains were also supported by the rollout of the COVID-19 vaccines, even as investors were keeping an eye out towards the outlook for monetary policy. There was a decline in longer-term US Treasury yields, and there was a flattening in the yield curve, as the market was looking towards the latest auctions of government debt and the Fed meeting.

Expectations of increasing inflation could push the Federal Open Market Committee to indicate that it will start boosting rates earlier than expected. Some economists said that after the fiscal stimulus packages, it is a given that a revision will be made to Fed GDP forecasts and some members of the FOMC may believe that rates will have to be increased sooner than they had expected last December. As far as currency trading is concerned, there was a 0.153% increase in the dollar index, while the euro declined by 0.2% to trade at $1.1931.