Futures lower as Fed comments, Brexit vote spook investors

[June 16, 2016]  By Yashaswini Swamynathan

(Reuters) - U.S. stock index futures were lower on Thursday, a day after the Federal Reserve kept interest rates unchanged but warned of slowing economic growth and the repercussions of Britain's possible exit from the European Union.

The Fed kept borrowing rates at 0.25 percent-0.30 percent and said it continued to expect two hikes this year, but the consensus seemed shakier with six of the 17 policymakers projecting just one hike. In March, only one official had done so.

Fed Chair Janet Yellen sounded caution that the central bank needed to see more clear signs of economic strength before lifting rates and threw some blame of her current stance on the June 23 Britain vote on its membership in the EU.

The Fed lowered its economic growth forecast for this year and the next to 2 percent from 2.1 percent.

Wall Street gave up gains and closed lower for the fifth straight day on Wednesday as Yellen's gloomy forecast spooked investors.

Global stocks have been under duress for a week as looming uncertainty about a Brexit next week pushed investors to safe-haven assets such as gold and the yen.

Adding to the dour mood was a decision by the Bank of Japan which refrained from offering additional monetary stimulus despite anemic inflation and weak global growth.

Oil prices remained under pressure for the sixth day, stoking investor concern. [O/R]

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 10, 2016. REUTERS/Brendan McDermid

Investors looking for any hints on the strength of the economy will keenly watch for data on the monthly consumer price index, which is expected to have increased 0.3 percent in May after rising 0.4 percent the previous month. The data is scheduled for release at 8:30 a.m. ET (1230 GMT).

Pioneer Natural Resources  fell 3.48 percent to $156.85 premarket after agreeing to buy real estate assets from Devon Energy. Pioneer was the biggest loser among S&P components.

Kroger rose 2.9 percent to $36.75 ahead of results.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian)

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