- Investors watching for signs of faster policy normalization.
- Fed statement due at 1400 EDT/1800 GMT.
- Russian rouble hit by Biden comments on Putin.
- MSCI global share gauge down, tech stocks weaker.
NEW YORK: Benchmark US Treasury yields hit a fresh 13-month high and a gauge of global stocks dropped on Wednesday as investors awaited the highly anticipated outcome of the latest Federal Reserve meeting.
The Russian rouble weakened by more than 1% after US President Joe Biden said his Russian counterpart Vladimir Putin will "pay a price" for directing efforts to meddle in the 2020 US presidential election.
Fed policymakers are expected to forecast that the US economy will grow in 2021 at the fastest rate in decades as COVID-19 vaccinations rise and a $1.9 trillion relief package aids households.
Ahead of the Fed statement expected at 1400 EDT/1800 GMT, the yield on the benchmark US Treasury note rose to 1.676%.
"This is one of the most important Fed meetings we've had for some time and the impact will be felt across asset classes," said Seema Shah, chief strategist at Principal Global Investors.
"Markets are hoping for reassurance from the Fed that rising bond yields are not something to worry about, and that takes a bit of steam out of the bond market."
On Wall Street, the rise in bond yields continued to pressure stocks, including tech and growth shares.
The Dow Jones Industrial Average rose 7.85 points, or 0.02%, to 32,833.8, the S&P 500 lost 16.06 points, or 0.41%, to 3,946.65 and the tech-heavy Nasdaq Composite dropped 96.22 points, or 0.71%, to 13,375.35.
"Market is of the view that the 10-year yield could be higher and if the Fed signals anything that matches that view, we could see yields jump past the 2% mark," said Arthur Weise, chief investment officer at Kingsland Growth Advisors.
The pan-European STOXX 600 index lost 0.51% and MSCI's gauge of stocks across the globe shed 0.43%.
Benchmark 10-year notes last fell 8/32 in price to yield 1.6497%, from 1.623% late on Tuesday.
In currencies trading, the dollar index rose 0.002%, with the euro up 0.09% to $1.1911.
The sell-off in the rouble intensified after Biden was quoted by ABC News as saying that Putin will face consequences for directing efforts to swing last year's US election in Donald Trump's favor.
"There will be more sanctions coming, that is clear. The question is how severe?" said North Asset Management's Peter Kisler.
Oil slipped for a fourth day as concerns about weaker demand in Europe outweighed an industry report that showed US crude inventories unexpectedly fell last week.
US crude recently fell 0.52% to $64.46 per barrel and Brent was at $67.93, down 0.67% on the day.