Economy

US Treasurys higher as investors prepare for Federal Reserve meeting

US Treasurys higher as investors prepare for Federal Reserve meeting”

Citing strength in the USA job market, business investment growth, and "moderate but durable" economic expansion, the Federal Reserve-as expected-left interest rates unchanged at the end of its two-day policy meeting Wednesday.

Crucially for financial markets, the Fed's projections of the path for the federal funds remained essentially unchanged for this year and next - Fed officials still see one more quarter-point increase before the end of this year (probably December), and three such hikes next year.

"Information received since the Federal Open Market Committee met in July indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year". It added that the near-term risks to the economic outlook remained "roughly balanced" but that inflation was being watched "closely". If it goes wrong, it could send stock and bond markets into a tailspin that could spill over into the broader economy.

According to the CME FedWatch, investors have priced in a 70.5% chance of a rate increase in December; two days ago the odds were 56.6%. But in close-to-zero rate territory, QE allows policymakers to buy longer-term bonds at a much larger scale, with the hopes that doing so will also pull down long-term interest rates as well.

Investors were also assessing the likely impact of the Fed's decision to start ending monetary stimulus by reducing its approximately $4.2 trillion in holdings of U.S. Treasury bonds and mortgage-backed securities from October. The balance-sheet expansion was result of the Fed's so-called quantitative-easing programs - buying up financial assets to keep money flowing through the economy.

Five of the 11 major S&P sectors were lower, with the consumer staples index's .SPLRCS 0.74 percent fall leading the decliners.

The U.S. dollar rose against a basket of currencies .DXY after the release of the Fed's policy statement. It now projects even faster growth this year of 2.4 percent, an increase from it forecast of 2.1 percent earlier this year.

He has offered mild praise of Yellen after calling her "obviously political" during the 2016 campaign, insisting she held down interest rates under President Obama to make the economy look stronger than it actually was.

"This implies that in the absence of inflation, there may be little need for additional Fed rate hikes to tighten financial conditions", says Patel. Besides, the Fed hinted that one more interest rate hike may be introduced before the end of the year.

"We were definitely not pricing in another rate hike for this year", Hurley said.

"The BOJ will patiently continue accommodative monetary policy to achieve 2 percent inflation".



Like this

Latest


22 September 2017
Eagles may be ready to take a Chance on Warmack
Now, I don't expect the Eagles to have a whole lot of success running the ball against a very strong New York Giants front. The problem is, as Bleeding Green Nation points out , Wentz completed just 1-of-6 screen pass attempts against the Chiefs.

22 September 2017
Frontier Communications Corp 2017 Q2 Institutional Investor Sentiment Worse Than Expected
Raymond James Financial Services Advisors upgraded its position in Frontier Communications Corporation by 53.0% in the 2nd period. The High Revenue estimate is predicted as 2.27 Million, while the Low Revenue Estimate prediction stands at 2.24 Million.

22 September 2017
State reports 2nd human case of West Nile Virus
A man from Hampden County is the second person in MA confirmed to have contracted West Nile Virus this year. MA officials are confirming the second human case of West Nile virus in the state this year.

22 September 2017
Westfield Capital Management Reduces Stake in Palo Alto Networks,
BidaskClub upgraded Palo Alto Networks from a "strong sell" rating to a "sell" rating in a research note on Thursday, August 17th. As of the end of the quarter Baird Financial Group, Inc. had disposed of a total of 9,008 shares trimming its position 10.2%.

22 September 2017
Leclerc secures four FP1 outings with Sauber
Charles Leclerc is the most talked-about young driver on the path to F1 and is now poised to win the Formula 2 championship . Joining four upcoming sessions means Leclerc will be in a Formula 1 auto every weekend he isn't racing for Formula 2 .

22 September 2017
BlackBerry Ltd (NASDAQ:BBRY) Rises 0.30% Pre-market
Several analysts have released their opinion on BlackBerry Limited (NASDAQ: BBRY ), with 1 analysts believing it is a strong buy. Quinn Opportunity Partners LLC boosted its position in shares of BlackBerry Limited by 24.8% during the second quarter.

22 September 2017
Up-to-date Analyst's Assessments: Union Pacific Corporation (UNP), Hologic, Inc. (HOLX)
BidaskClub cut shares of Union Pacific Corporation from a "hold" rating to a "sell" rating in a report on Thursday, July 27th. The stock of Square Inc (NYSE:SQ) hit a new 52-week high and has $30.22 target or 6.00% above today's $28.51 share price.

22 September 2017
Malala meets PM Abbasi, discusses female education in Pakistan
Abbasi said he held a meeting with former Prime Minister Nawaz Sharif - who is in London these days. Though he added that it is totally India's wish if the country wants to provide any economic help.

22 September 2017
Arsenal's Danny Welbeck Set to Miss More Time After Suffering Groin Injury
Asked if Sanchez was central to his plans, Wenger said: "Not more than any other". "There is no disguised attitude on my side". Sanchez could have played if he had been fit". " Jack Wilshere is involved too", Wenger said.

22 September 2017
South Korea urges North Korea to abandon nukes, seek talks
On Saturday, Pyongyang flew a missile over Japan's airspace in a test, in blatant defiance of UN-led sanctions and U.S. warnings. World Food Program for providing food and medicines to North Korean children and pregnant women, the Unification Ministry said.



Recommended