Business

Stocks, dollar firm ahead of Fed decision

Stocks, dollar firm ahead of Fed decision”

Officials also dropped their unemployment rate forecast to 4.3% for the end of 2017 and to 4.2% at the end of 2018 and 2019, compared to their March projection, which saw an unemployment rate at 4.5% in each year. Private economists had expected the move given the labor market's recent performance.

This could be combined with a decline in the Fed's own interest rate projections, known as "lowering the dots" in reference to the scattershot chart of individual Fed policymaker estimates.

The Fed also issued updated economic forecasts that showed it still foresees one additional rate increase this year, to follow Wednesdays increase and an earlier rate hike in March. The move follows a record run of jobs growth in the United States that has driven the unemployment rate down to its lowest level in 16 years. That said, as the Fed continues to raise rates in the coming year or two, that should eventually cause mortgage rates to go up.

Following the May meeting, the Fed kept the benchmark rate at 0.75-1 percent per annum.

Inflation has been more problematic, having long stayed below the central bank's 2 percent target rate. The central bank still sees the economy reaching its 2% inflation goal. Energy was dragged lower by falling crude prices, which were pressured by a smaller-than-expected drawdown in US oil inventories.

While markets and the Fed are never perfectly aligned on the future path of interest rates, they were as close as they had been in a while prior to the March Fed meeting.

The vote was 8-1, with Minneapolis Fed President Neel Kashkari dissenting from a rate increase for the second time this year, preferring no change. The hike will push interest rates above 1 percent for the first time since the immediate aftermath of the collapse of Lehman Brothers in 2008. Those forecasts are far below the 3 percent annual growth the Trump administration has said it can achieve through tax cuts, deregulation and tougher enforcement of trade rules to protect American jobs.

The Fed has in recent weeks wrestled with contradictory signals from unemployment and inflation.

USA stocks fell in volatile trading while the dollar pared losses on Wednesday after the Federal Reserve delivered a widely expected interest rate hike and announced it would begin cutting its huge holdings of bonds this year.

USA government bond prices rallied Wednesday after the inflation report from the Labor Department, sending the yield on the benchmark 10-year Treasury note to a fresh 2017 low.

But after comments by Bank of Canada Deputy Governor Carolyn Wilkins on Monday flipped markets towards an earlier rise in borrowing rates there, traders and analysts say "short" bets against the commodity bloc currencies have looked exposed. The Fed will likely want to unveil its plan well in advance of actually trimming its portfolio to avoid spooking the markets. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.



Like this

Latest


14 June 2017
Apple To Disallow Custom Prompts For App Ratings
So instead of going the obvious route and asking how much storage you have on your phone, I'm going to go a more app-specific way. I'm equally certain that the app in question will be rapidly removed from the store, along with the developer's account.

14 June 2017
The Crew 2 Announced, Speedboat and Plane Racing Confirmed
Finally, we're now with the birds, stunt flying through the stunning skybox and weaving through the buildings in the city. Essentially, you can unlock up to 18 cars in The Crew 2 by completing "actions" before the new game is released.

14 June 2017
Lonzo Ball showed poor conditioning in Lakers workout
For better and for worse, the Lakers are mindful of not overreacting to individual workouts considering the various restrictions. Some on the Lakers who watched Ball's workout last week said they thought he struggled with his conditioning.

13 June 2017
U.S. troops killed, 2 injured by Afghan soldier
Its spokesman Zabihullah Kujahid said online that the solider had been an "infiltrator" who had killed four American soldiers. The three previous US soldiers' deaths in Achin make up the entirety of USA combat fatalities in Afghanistan in 2017.

13 June 2017
SCO membership to further strengthen Pakistan
Prime Minister Muhammad Nawaz Sharif along with his delegation attended the meeting of the Heads of State Council of SCO. We want connectivity to pave way for enhancing cooperation and confidence among the societies and young people.

12 June 2017
After UK Election, The Only 'Certainty' In Britain Is Uncertainty
The deal sits uneasily with some Conservatives because of the DUP's opposition to abortion and same-sex marriage. The exact contours of a potential Conservative-DUP deal were not yet known.

11 June 2017
Cosby's chief accuser denies romance before alleged assault
Bill Cosby is accompanied by actress Sheila Frazier (l.) and Frazier's husband, John Atchison, a celebrity hairstylist. . On Tuesday, Constand testified , "I was having to recall a lot of facts", adding that "it was very overwhelming".

09 June 2017
New England Patriots Sign Julian Edelman to Contract Extension
A two-time Super Bowl Champion, Edelman most recently appeared in all 16 regular season games for the Patriots in 2016. Julian Edelman has been a key part of the New England Patriots offense ever since the departure of Wes Welker .

08 June 2017
Libraries have Summer Reading Program
Programs in Pembroke will be held at 10:30 a.m.at the Bryan County Elementary School Cafeteria, 250 Payne Drive. At registration, participants will receive the program guidelines, a reading log and a schedule of events .

07 June 2017
Predators goalie Rinne struggling as Pens take 2-0 lead
The game started well for the visitors when a strong individual effort by Aberg gave Nashville a 1-0 lead at 12:57 of the first. Boston did the same thing against Vancouver in 2011, also a seven-game series . "We can not go the penalty box".



Recommended