* U.S. stock prices slide on bets on faster Fed rate hikes
* Looming Scottish independence vote unnerves markets
* Dollar climbs to six-year peak vs yen
* Short-dated U.S. yields approach highest in over 3 years (Updates market action, changes dateline, previous LONDON)
By Richard Leong
NEW YORK, Sept 10 (Reuters) - U.S. stock prices fell on Wednesday on growing bets the Federal Reserve may raise interest rates faster than previously thought, while anxiety over whether Scotland might break off from the United Kingdom unnerved investors in Europe, hurting sterling and boosting the dollar.
The greenback reached a six-month peak against the yen and short-dated U.S. Treasuries yields approached their highest in over three years following a study released on Monday from the San Francisco Federal Reserve that showed investors underestimate the pace of eventual rate hikes.
Oil prices in London fell to new 16-month lows on rising supplies, while spot gold prices hovered near a three-month low on a strengthening dollar.
“The study by the San Francisco Fed unnerved investors that markets are too complacent about the pace of Fed rate hikes,” said Nick Stamenkovic, bond strategist at RIA Capital Markets in Edingburgh.
In early trading, the Dow Jones industrial average fell 22.31 points, or 0.13 percent, to 16,991.56, the S&P 500 declined 2.72 points, or 0.14 percent, to 1,985.72 and the Nasdaq Composite shed 0.73 points, or 0.02 percent, to 4,551.56.
Weakness on Wall Street and worries about a Scottish secession vote on Sept. 18 knocked the FTSEurofirst 300 index of top European shares down 0.2 percent at 1,382.74 points.
Tokyo’s Nikkei closed 0.25 percent higher.
The MSCI world equity index, which tracks shares in 45 nations, fell 1.25 points or 0.29 percent, to 426.89.
Some U.S. short-term rates futures for 2015 delivery fell to their lowest levels since early August, suggesting traders are pricing in more than a 50 percent chance the U.S. central bank might raise policy rates from near zero in the middle of next year, according to CME’s FedWatch.
Short-dated two-year U.S. yields, which are most sensitive to changes in traders’ view on Fed policy, hit 0.576 percent earlier, near a three-plus year high set at the end of July. This pulled short-dated European yields higher with German Schatz yields at minus 0.62 percent.
The shift towards pricing in a faster pace of U.S. rate hikes helped the dollar hold onto its recent gains.
The greenback touched a six-year high against the yen of 106.84 yen earlier Wednesday, while the dollar index, a measure of the greenback’s value against six major currencies, dipped 0.09 percent but remained not far below Tuesday’s 14-month high.
Sterling hit a 10-month low of $1.6050 before recovering almost a cent, while the euro recovered from Tuesday’s 14-month low of $1.2860 and stabilized above$1.29.
The recent rally in the dollar has depressed gold prices. Gold pared losses from a three-month low hit earlier Wednesday to stand at $1,250.60.
Brent crude for October delivery was last down 54 cents or 0.54 percent, at $98.62 a barrel. U.S. crude was last down 59 cents or down 0.64 percent at $92.16 per barrel. (Additional reporting by Jamie McGeever, Marius Zaharia in London; Editing by John Stonestreet and Meredith Mazzilli)