Economy

Trump says he'll announce new Fed head Thursday

A day before President Trump was expected to name their next leader, Federal Reserve policymakers made a decision to hold a key interest rate steady at between 1 percent and 1.25 percent. But it is hinting that it's preparing to resume raising rates as the economy shakes off the effects of recent hurricanes.

The Fed concludes a meeting later on Wednesday.

The combination of robust economic and corporate earnings growth from the third quarter is giving the long-running bull market a new lease of life. Policymakers slightly upgraded their assessment of economic growth from moderate to "solid" despite disruptions from hurricanes Harvey and Irma. Economists have projected that on Friday the government will report a job gain of 310,000 for October - a dramatic rebound. It reiterated its expectation that prices will resume picking up toward its 2 percent inflation target.

US Federal Reserve's status quo on interest rates came a day before President Donald Trump plans to unveil Janet Yellen's replacement at the chair.

Powell has already been through that confirmation process in order to become a member of the Fed's board. Just before the FOMC statement was released, Trump said he'll announce his pick Thursday afternoon, adding that people will be "extremely impressed with this person".

Trump's announcement will be scrutinized for what it might mean for the direction of interest rates, and perhaps for the economy.

It's still possible, however, that Trump could reappoint Yellen to a second term.

The Fed has lifted its key interest rate twice this year, in March and June, and that so-called federal funds rate is in a range of 1% to 1.25%.

And so far this year, inflation has actually been slowing.

A rise in oil prices to their highest level since mid-2015 also served to boost energy names. Prices paid is expected to fall to 67.8 vs 71.5 last month.

"The base is solid, the economic base is solid, the earnings base has been good, growth is good".

Bitcoin hit another record high on Tuesday after CME Group Inc, the world's largest derivatives exchange operator, said on Tuesday it will launch a futures contract for bitcoin later this year, marking a major step in the digital currency's path toward legitimacy. It jumped over 1 percent to $0.6931 after the country's jobless rate sank more than expected to a nine-year low of 4.6 percent.

If confirmed by the Senate, Powell would take over from Yellen when her four-year term as Fed chair expires in February. A current Fed governor, Jerome Powell, appears to be the front-runner to be nominated.

The market is also looking forward to the impending naming of the next Fed chair, the Bank of England policy meeting on Thursday, and more data, including USA payrolls figures on Friday.



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