Why bond ETFs surged despite Fed rate hike

Why bond ETFs surged despite Fed rate hike”

In a separate report, the department announced that US import prices declined 0.3 percent in May after increasing 0.2 percent in April, while the price index for USA exports declined 0.7 percent in May following a 0.2-percent advance in April.

The Dow Jones industrial average was up 22 points, or 0.1 percent, to 21,352, little changed from before the announcement.

In her post-meeting press conference, the Federal Reserve's chairperson, Janet Yellen, warned that the Fed could implement its balance sheet unwinding process soon if the economy continues to perform as expected. This has in turn given the Fed the confidence to start selling off part of the more than $4.5 trillion of holdings that it amassed at the time of and following the recession.

Analysts in recent weeks have become increasingly doubtful there would be a third rate increase later this year, as inflation, consumption and other economic data have indicated the weakness seen in the first quarter has continued.

"The growth of the balance sheet was an unprecedented experiment so the reduction of the balance sheet is going to be the flip side of that same coin", the budget director said.

The interesting point of announcing this carefully constructed plan now is that, should Yellen's four-year term that ends on February 3, 2018 not be renewed, then the next Fed Chair will struggle against the constrains of the program and find it hard to change the plan.

What could this mean for markets and thus investors?

Mulvaney said the administration did not factor the Fed's balance sheet intentions into Trump's proposed budget.

More news: Laredo Petroleum, Inc. (LPI) Given Underperform Rating at Credit Suisse Group

After having gained strong support after the weak USA data, gold hit resistance close to $1,280 and fell sharply to lows below $1,260.

The rate hike should not come as a surprise for investors on Wall Street.

Yes, a complex situation is coming our way.

The Federal Reserve was able to modestly raise rates because of the U.S. economy's relatively strong performance, in comparison with the U.S. or Europe.

In currency markets, the dollar is up to 110.22 yen from Tuesday's 110.04 yen. In fact, in the Summary Economic Projections that accompanied the interest rate decision, the Fed's median forecast for GDP growth for 2017 actually ticked higher, up to 2.2%, from 2.1% in March.

The 10-year Treasury note TMUBMUSD10Y, +1.39% ticked up 1.1 basis point to 2.149% point, compared with 2.138% late Wednesday in NY, which marked the lowest yield for the benchmark note since November 10.

Prices surged early Wednesday after a report showed the consumer-price index fell to 1.9% on an annualized basis in May from 2.2% the previous month.

Like this



26 June 2017
Attention on Supreme Court as justice weigh Trump travel ban
Kansas , which struck down laws that purported to criminalize certain sex acts between consenting adults, United States v. Hodges , which struck down the laws barring same-sex marriage in the states where it was still illegal at the time .

26 June 2017
Four black teens pushing a Canadian float spark claims of racism
The float featured Quebec vocalist Annie Villeneuve singing "Gen du pays" on a platform that was being pushed by four black men. The video has been shared over 6,000 times, and has a running thread of almost 500 comments-many of them livid.

26 June 2017
Donald Trump awaits his 'true friend' Narendra Modi
They will look to expand ties on defense and fighting terrorism, but strains are likely on trade. Both leaders will be meeting in the background of a trade deficit in India's favor.

26 June 2017
Whole Foods Market (NASDAQ:WFM)
In other news, insider Juan Nunez sold 14,502 shares of the business's stock in a transaction that occurred on Thursday, May 18th. According to the analysts, Whole Foods Market (NASDAQ: WFM ) is expected to announce $0.33/share EPS for the current quarter.

26 June 2017
Super NES Classic finally shows up
Of course this will look like the European and Japanese version of the SNES with its rounded corners and colourful face buttons. To sweeten the pot this time, the line-up includes some rare and never-released games.

26 June 2017
Gerrymandering gave GOP 1 extra legislative seat
North Carolina's legislative and congressional maps, drawn by Republicans after the 2010 Census, have faced protracted litigation. How the court rules could influence congressional redistricting and legislative reapportionment nationwide after the 2020 Census.

26 June 2017
Two men beaten in robbery, one in critical condition
Surveillance video shows the victims were attacked by at least four black males who beat them, stole their wallets and cell phones, and then fled.

26 June 2017
Driver Missing After Fiery Crash Kills Passenger
The ramp to the expressway was expected to remain closed for several hours after the crash and throughout the morning rush hour. A female passenger in her 20s was pronounced dead on the scene by responding emergency crews, police said.

26 June 2017
Sunday shows omit key consequences of GOP Senate health care bill
All they do is delay and complain. "It's hard for me to see the bill passing this week", Collins said. Then he criticizes two prominent Democratic senators.

26 June 2017
North Korea Says Warmbier's Death a 'Mystery to Us as Well'
President Trump condemned the North's "brutality", and other political leaders demanded that it explain what happened to Mr. The spokesman did not describe how Mr Hunziker died, but claimed that the United States then "totally ignored" his death.