Published: Fri, June 16, 2017
Markets | By Noel Gibbs

Federal Reserve Continues To Normalize Monetary Policy

Federal Reserve Continues To Normalize Monetary Policy

"With financial conditions remaining supportive. and U.S. financials breaking higher, the Fed may see little reason to moderate its rate hike projections when meeting today", strategists at Morgan Stanley said in a note to clients. Moments earlier, the Fed chose to raise its short-term interest rate target by a quarter point, as expected.

In view of the stable economic conditions, the Fed plans to reduce its 4.5-trillion-U.S.dollar balance sheet later this year and unveiled detailed plan to trim its bond holdings. The Fed also announced plans to start gradually paring its bond holdings later this year, which could cause long-term rates to rise. The FTSE 100 appeared on the back foot after those difficulties in foreign markets, also remaining under pressure because of fears that the Brexit deal negotiations are likely to leave the United Kingdom walking away with a less than optimal trade and economic deal.

The latest rate increase, announced in a statement after a Fed policy meeting, comes as the us economy is growing only sluggishly. Unemployment dipped to 4.3 percent in May, a 16-year low.

The statement also said inflation "has declined recently" and in the next 12 months "is expected to remain somewhat below 2 per cent in the near term".

Italians missing in London fire
The cause of the fire is under investigation, and authorities have refused to speculate on what could have started the blaze. Mansi spent more than three decades with the London Fire Brigade - nearly half of those years as a fire investigator.

Finance Minister Kim Dong-yeon brushed off concerns about the U.S. Federal Reserve's move to raise its benchmark interest rate, saying the impact of the Fed's decision on the Korean economy will be limited as the move had been widely expected. The Fed continues to project that prices, as measured by a gauge tied to consumer spending, will rise 2 percent in 2018 and 2019, achieving its target.

The Fed said it expects United States inflation to be at 1.7% by the end of this year, down from the 1.9% previously forecast. The amount of securities the Fed held on its balance sheet ballooned from less than a trillion dollars before the crisis to roughly $4-and-a-half trillion. The FTSE 100 of Britain dropped 1.1 percent to 7,393. The economy has now added new jobs for 80 straight months.

A man looks at a street TV screen showing Japan's Nikkei 225 index and Japanese yen-U.S. dollar exchange rate Thursday, June 15, 2017, in Tokyo.

"Near-term risks to the economic outlook appear roughly balanced, but the committee is monitoring inflation developments closely", the Federal Open Market Committee said in a statement Wednesday.

London Firefighters Search for More High-Rise Fire Victims, at Least 12 Dead
He told LBC Radio: "When we turned up we could only see one side on fire but in a couple hours that whole building was engulfed". It's totally, totally unacceptable in Britain that this has been allowed to happen and people lose lives in this way.

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 betting is that the administration will choose officials who will tilt the Fed toward a more "hawkish" stance.

Brent crude settled down 8 cents at $46.92 a barrel, while USA crude settled down 27 cents at $44.46, after touching a six-month low of $44.32 a barrel.

In fact, despite all the hand-wringing about rising rates ever since the Fed embarked on the current tightening cycle in late 2015, it turns out that the 10-year yield is actually lower today than it was when the central bank made its first hike. It rose 0.2 per cent to 109.75 yen and was up 0.5 per cent against the euro at US$1.1160.

Gold hits three-week low on firm dollar and U.S. jobs data
Gold edged up early on Thursday from a near three-week low hit in the previous session, as Asian stocks fell on a report that U.S. The benchmark lending rate was lifted by a quarter percentage point to a target range of 1 per cent to 1.25 per cent.

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