Thursday, 21 June, 2018

Fed Raises Key Interest Rate For 4th Time Since 2015

A weak report on retail sales sent bond yields lower and high-dividend stocks like utilities and real estate companies higher Fed raises interest rates again in further sign of confidence in US economy
Preston Stone | 29 June, 2017, 07:29

The Federal Reserve signaled confidence in the strong economy Wednesday with its second interest rate hike of 2017, bringing its benchmark rate up a quarter-point to push it over 1% for the first time since the 2008 financial crisis.

However, markets did not respond as expected to the Fed's hawkish stance, with the rand firming and U.S. treasuries weakening even as the Fed remains positive on a higher consumer inflation trajectory, which is not supported by actual data.

In a separate report, the department announced that USA import prices declined 0.3 percent in May after increasing 0.2 percent in April, while the price index for US exports declined 0.7 percent in May following a 0.2-percent advance in April. Many U.S. stocks will be vulnerable to an ongoing tightening in financial conditions especially those with overstretched valuations. Trump's legal team denounced the report. The Nasdaq Composite Index dropped 60.09 points, or 0.97 percent, to 6,134.80.

"I think it was all expected, the USA economy is doing pretty good, we're pretty close to full employment and inflation is pretty close to the target". But traders were divided over the possibility, with some analysts noting the yuan is in better than a few months ago while liquidity in China has already been tightening.

At a press conference on Thursday morning (Australian time), Fed chair Janet Yellen said the central bank continues to expect that "the ongoing strength of the economy will warrant gradual increases" to the important interest rate.

The move came after two reports posted weaker-than-expected economic data earlier on Wednesday.

The data had knocked the dollar and US bond yields to its lowest level in seven months against a basket of currencies.

Fitch said the impact on bond yields will also be determined by how far the term premium rises from the current historically low level partly caused by the Fed's Quantitative Easing (QE) programme.

North Korea claims American college student released from detainment for "humanitarian reasons"
He was last seen publicly that March, when he was sentenced for subversion to 15 years in prison with hard labor. Otto Warmbier was rushed to a Cincinnati hospital shortly after arriving from Pyongyang late Tuesday night.

The euro traded at $1.1210, after having hit a seven-month high of $1.1296.

In currency markets, the dollar is up to 110.22 yen from Tuesday's 110.04 yen. "They are expecting 2 percent, which may not be realistic".

"This is the most optimistic I've heard her on growth, on the labor market, as well as inflation - willing to look through some of that recent weakness", Santos said in an interview with " Closing Bell".

The New Zealand dollar slipped 0.3 per cent to US$0.7243 after touching a low of US$0.7234, moving away from the previous session's four-month high of US$0.7319.

The Fed also issued updated economic forecasts that showed it foresees one additional rate increase this year to follow Wednesday's increase and an earlier rate hike in March.

Crude oil prices were listless after having slumped almost 4 percent to their lowest close in seven months on Wednesday, on an unexpected large build in gasoline inventories.

The problem with that line of thinking is that other items such as rents, clothes, cars, and airfares are also getting cheaper.

"Traders appear unconvinced by the possibility of another U.S. rate hike this year, despite what the Fed indicated, with the implied probability of one by December standing at below 50%", said Oanda analyst Craig Erlam.

Recommended

  • Germany reach semis as referee needs VAR double-take

    Germany reach semis as referee needs VAR double-take

    James Troisi opened the scoring for Australia on 42 minutes before Martin Rodriguez equalised for Chile on 68 minutes. Cameroon had Ernest Mabouka sent off in controversial fashion on 64 minutes for a unsafe tackle on Emre Can .
    Michael Jordan sends congratulatory note to new MVP Russell Westbrook

    Michael Jordan sends congratulatory note to new MVP Russell Westbrook

    By night's end, he had added an accessory - the NBA's Defensive Player of the Year Award. Westbrook received 69 of the 101 first-place votes, while Harden finished with 22.
    Florida Woman Arrested After Having Baby With Child: Sheriff's Office

    Florida Woman Arrested After Having Baby With Child: Sheriff's Office

    She was 22 when she allegedly had sexual intercourse with the boy inside a Port Richey home, authorities said. According to deputies, during January 2014, Mowry and the victim were at a residence in Hillsborough County .
  • Beyonce and Jay Z 'celebrating birth of twins'

    Beyonce and Jay Z 'celebrating birth of twins'

    Beyonce and Jay Z welcomed twins earlier this week, according to multiple sources - but the couple are yet to confirm this. But Beyonce has revealed few details about her pregnancy, and did not say when the babies were due to be born.
    Saudi king names son his heir in place of nephew

    Saudi king names son his heir in place of nephew

    That account has frequently criticised Mohammed bin Salman , suggesting his impulsiveness could be risky . The King Salman , 81, is reportedly not in the best of health.
    FT: Insurance industry warned of fire risk month before tower block blaze

    FT: Insurance industry warned of fire risk month before tower block blaze

    There are unsafe blocks also in seven London boroughs - Barnet, Brent, Camden, Hounslow, Islington, Lambeth and Wandsworth. Prime Minister Theresa May says "the government is supporting local authorities" testing their apartment blocks.
  • Roger Federer thrashes Alexander Zverev, clinches ninth Halle Open title

    Roger Federer thrashes Alexander Zverev, clinches ninth Halle Open title

    The Stuttgart defeat was the first time Federer had lost his opening match at a grass-court tournament since 2002 Wimbledon. But Zverev, ranked No. 12, had no answer for Federer's aggressive play and near flawless execution.
    Trump takes another swipe at CNN following resignations

    Trump takes another swipe at CNN following resignations

    Fake News CNN is looking at big management changes now that they got caught falsely pushing their phony Russian stories. People familiar with the matter said the impact of CNN's retraction is reverberating throughout the newsroom.

    Keeping CEO job was 1 fight too many for Uber's Kalanick

    As of today, Travis Kalanick's unfettered reign at the $70 billion Ayn Rand-themed auto service that lives on your phone is over. Attorney General Eric Holder , saying it would reduce Kalanick's role and improve the complaint process for workers.
  • Trump says US-India relationship never better

    Trump says US-India relationship never better

    The US is also set to approve a $2 billion sale of unarmed drones to help in surveillance of the Indian Ocean. Prime Minister Narendra Modi and US President Donald Trump after their one-on-one meeting.
    The SNES Classic arrives on September 29th

    The SNES Classic arrives on September 29th

    Super Mario World , Starfox and Yoshi's Island are set to be re-released later this year as part of a new classic SNES console. Still, it's nice to see Nintendo acknowledge the shortcomings of its last plug-and-play device.
    Conference: US mayors may shape national climate policy

    Conference: US mayors may shape national climate policy

    Mayors are prepared to respond with, not just talk, but thoughtful deliberate action, said Mayor Karen Freeman-Wilson of Gary, IN. Conference of Mayors in Miami Beach.

Draghi: Considerable stimulus still needed despite recovery Draghi: Considerable stimulus still needed despite recovery Federal Reserve Chair Janet Yellen , in a speech in London, said she didn't foresee another financial crisis "in our lifetimes". General Mills rose 1.6 percent to $56.46 after the Cheerios maker's quarterly profit beat estimates.

Merck hit by cyberattack causing mass disruption in Europe Merck hit by cyberattack causing mass disruption in Europe This is being addressed by the company and we do not know how long it would take to resolve the issue", the official said. The current attacks come weeks after the Wannacry ransomware attack, which impacted systems of many companies.

GOP lawmakers to take seats after special election wins GOP lawmakers to take seats after special election wins Democrats will continue to lose state legislature seats, governorships and congressional seats with her at the helm. Nathan Deal was campaigning for a former opponent his staff once described as a spout of " unhinged blather ".

Brian Head Fire has burned almost 50000 acres Brian Head Fire has burned almost  50000 acres Two people were hospitalized in the solo-vehicle crash and subsequent auto fire that caused the wildfire on Monday afternoon. The blaze has grown to 2.5 square miles (6.5 sq. kilometers) since it broke out outside San Luis Obispo on Monday afternoon.

Michael Jordan, Kevin Durant congratulate MVP Russell Westbrook Michael Jordan, Kevin Durant congratulate MVP Russell Westbrook And I can't thank you enough". "So, essentially, we have each other to thank for these careers". I could not do that if I didn't have the support of my National Basketball Association family".

Derailment caused by 'improperly secured' rail Derailment caused by 'improperly secured' rail The derailment sent travelers tumbling to the floor and forced hundreds of passengers to evacuate through darkened tunnels. Lhota said the emergency braking system on the train triggered, but it wasn't immediately clear why.

DPRK: 'Too Late' For United Korean Team at 2018 Winter Olympics DPRK: 'Too Late' For United Korean Team at 2018 Winter Olympics Choue said he is hopeful this year's edition of World Taekwondo's flagship event would be a "festival of peace and harmony". The US are activating a missile defence system in South Korea and tightened sanctions against the North in April.

Chernobyl radiation monitoring system hit by global cyberattack Chernobyl radiation monitoring system hit by global cyberattack More than 30 members paid into the bitcoin account associated with the Cyber attack . And ABC News says a Cadbury chocolate factory in Hobart has been hit.

America's Cup: New Zealand sail to victory with crushing win over US America's Cup: New Zealand sail to victory with crushing win over US Dalton met secretly at his home with the 26-year-old, who has won Olympic gold and silver medals in the 49er skiff class. One thing we know for sure from looking at the reactions: New Zealand really knows how to throw a party.

Indians manager Francona leaves game after not feeling well Indians manager Francona leaves game after not feeling well Francona presented Rangers first baseman and former Indian Mike Napoli with his American League Championship ring before the game. Cleveland is also 1-5 in Bauer's last six Wednesday starts and 4-0 in Bauer's last four starts versus the AL West.

CNN Producer Fesses Up: We're Just Doing The Russia Stuff For Ratings The story was replaced with an editor's note of apology to Anthony Scaramucci , the Trump aide who was investigated in the story. The release of the embarrassing video comes after another high-profile fake news flop at the network.

Federer beats Alexander Zverev 6-1, 6-3 for 9th Halle title While speaking about his opponent Federer said, "It was all a little uncertain because I don't know him that well". Lopez, whose last tournament win was at Gstaad a year ago , has never got past the quarter-finals at Wimbledon .

Next season's Premier League fixtures have been released Next season's Premier League fixtures have been released Champions Chelsea will open the defence of their league title at home when they host Burnley on the first day of the new season. The fixture will conclude West Ham's preseason games and see Pablo Zabaleta given the opportunity to face his former side.

Professor Loses Job for Saying Otto Warmbier Got 'What He Deserved' Professor Loses Job for Saying Otto Warmbier Got 'What He Deserved' President Donald Trump , who described the 22-year-old OH native's passing away as a "disgrace". Katherine Dettwyler, 62, said Warmbier " got exactly what he deserved ".

Nintendo Updates 'Arms' With LAN Play, Arena Mode Nintendo Updates 'Arms' With LAN Play, Arena Mode Fixed an issue where Barq (of Byte & Barq) does a big warp when riding the snakeboard and finishing a special move rush. Up to 4 players can be in the arena, and players not now fighting watch as spectators.