Economy

Treasury Yields, Dollar Surge as Fed Raises Odds of December Rate Hike

Treasury Yields, Dollar Surge as Fed Raises Odds of December Rate Hike”

"What we need to figure out is whether the factors that have lowered inflation are likely to prove persistent", she said.

Add it all together and the message is this: The Fed is simply unwilling to see just how low the unemployment rate can go without stoking higher inflation.

US central bankers are counting on steady growth and low unemployment to raise inflation closer to their goal, which would support their policy of gradual tightening through interest-rate increases and a reversal of quantitative easing.

This was when the markets became spooked about a Federal Reserve asset sale plan and a fear of rising rates that might overload the ability of the markets to absorb all that new supply. There was no financial market reaction to news that the second-quarter current account deficit was narrower than economists were expecting. Investors will also be listening for any update on the timing of another increase to the Fed's key interest rate.

The stronger dollar against the yen buoyed exporters on Tokyo's Nikkei, with the index up 1.5 percent by the break as traders also returned from a three-day break to play catch-up with Monday's global rally.

Despite subdued inflation, the Fed remained firm on raising the policy rate.

It also said it will hold benchmark interest rates steady, and signalled a rate hike by the end of 2017. As the jobless rate improved, interest rates have been raised, but remain below historic averages.

U.S. Treasury yields reached more than a two-month high after the U.S. Federal Reserve said it would begin reducing its $4.5 billion balance sheet starting in October. The portfolio primarily consists of government and mortgage-backed bonds.

-The yield on 10-year Treasuries advanced two basis points to 2.27 percent, the highest since July. Tata shares rose 1.7 percent.

In its policy statement, the Fed took note of Harvey, Irma and Hurricane Maria, which it said had devastated many communities.

Sept 20 (Reuters) - The S&P and the Dow were little changed on Wednesday but hovered near record levels as investors waited to hear from the Federal Reserve on future interest rate hikes this year while the tech-heavy Nasdaq was pulled lower by a drop in Apple. Homebuilder confidence came in weaker than expected this morning.

Markets anticipated the balance sheet unwinding and have been quiet so far on Wednesday. The Dow gained 63.01 points, or 0.3 percent, to 22,331.35.

WALL STREET: The S&P 500 index rose 3.64 points, or 0.1 percent, to 2,503.87.

The question of when and how the Fed will manipulate its main policy lever - its target for short-term rates - in coming months is less clear. Members of the Fed's policy-setting committee are eyeing one more increase to the federal funds rate this year, likely at the December meeting. MSCI's index of world stocks was last up 0.2 percent and hit an intraday record high of 487.07.

In Europe, Germany's DAX and the CAC 40 in France were both flat.



Like this

Latest


22 September 2017
Rob Gronkowski (groin) limited in Patriots' practice on Thursday
Our models now project Gronkowski for 14.3 FanDuel points as the top tight end in Week 3, at a cost of $8,400. Even being a limited participant is an improvement for Gronkowski, who exited Sunday's game early.

22 September 2017
Legionnaire's disease found at Minn. senior living center
We are in the process of a full environmental assessment the potential sources with outside experts and public health officials . Our precautions are following the Center for Disease Control Guidelines.

22 September 2017
Which Brand Will She Appear on?
Word is that WWE officials already have a storyline for Paige's return and that it will be for the SmackDown brand. WWE star Paige teased on Instagram Tuesday that she is returning to the company following an extended hiatus.

22 September 2017
Nigeria Customs seize 470 firearms imported from Turkey
According to him, the importer of the cargo is Great Oil and Gas Ltd and the vessel named "MV Arkas Africa" owned by Hull Blyth. He said Customs officers discovered that the guns were concealed in a 20-foot container.

22 September 2017
Timberwolves agree to deal with veteran point guard Aaron Brooks, source says
Brooks, 32, appeared in 65 games last season with in averaging 5.0 points and 1.9 assists in 13.8 minutes. The Wolves will open training camp on Saturday in San Diego after hosting media day on Friday.

22 September 2017
United Kingdom fund to build one of world's biggest solar farms in Iran
A green investment company in the United Kingdom plans to invest €500 million (£442.4m) in a solar power project in Iran . The project is expected to support Iran's aim of installing 5GW of new renewable energy capacity by the end of the decade.

22 September 2017
American Airlines Group Inc (NASDAQ:AAL) 2017 Q2 Sentiment Report
Rafferty Asset Management LLC's holdings in American Airlines Group were worth $2,346,000 at the end of the most recent quarter. If you are accessing this piece on another site, it was illegally stolen and republished in violation of global copyright laws.

22 September 2017
Deals: Amazon India offers great discounts, iPhone prices cut up to 30%
The Great Indian Festival sale will be launched for non-Prime customers from September 21 and will run until September 24, 2017. But, during the first 2 days of the Flipkart Big Billion Day sale, the smartphone was available at nearly half the price.

22 September 2017
This Temple lineman got a strip-sack, recovery, and long TD, all by himself
With the win, Charlie Strong's Bulls are 4-0, with a road game against East Carolina coming up next week. Unfortunately, that's really the only positive for Temple on the night.

22 September 2017
Pine County Sheriff: Hunter Found Along Minnesota-Wisconsin Border
A Pine County officer was able to exchange a few text messages with Kniefel before cell phone signal was lost again. Kniefel told authorities he had rationed the food and water he had with him, but knew that a search was on for him.