US Fed to announce stimulus drawdown, let rates stand

US Fed to announce stimulus drawdown, let rates stand

US stocks edged up in early afternoon trading on Tuesday, helped largely by gains in telecom stocks, but traded in a narrow range as investors stayed away from making major bets ahead of the Federal Reserve's policy meeting.

Asian shares hit a decade high on Monday and the dollar hovered around an eight-week peak against the yen, in the start to a week in which the Fed is likely to announce balance sheet tapering. The S&P 500 closed at a record for its second consecutive day on Monday while the Dow Jones Industrial Average enjoyed its fifth consecutive record close. Australia's S&P/ASX 200 fell 0.7 percent to 5,668.90. Benchmark 10-year notes fell 9/32 in price to yield 2.27 percent, after yields got as far as 2.29 percent, the highest since August 8. The Fed is expected to gradually reduce this program over the next few years.

At the same time, the Fed did not raise its benchmark interest rate from its current 1 percent to 1.25 percent target, but indicated that one more hike is likely this year.

"Certainly that will have a big influence as we look towards the readings on inflation going forward".

Federal Reserve policymakers said today they're keeping interest rates where they are for now.

Fed officials also expect both low unemployment and low inflation to persist over the next several years, a curious combination that economists are struggling to understand. The median dot plot continued to project one more rate hike this year, followed by three more increases in 2018.

The US dollar was little changed on the day by 1715 BST, with the dollar index steady at 91.744, down only 0.05%.

With the North Korea issue put on the backburner for now and two hurricanes in the rearview mirror, investors turned their attention back to macro issues and particularly the Federal Reserve's policy meeting this week.

Back-to-back hurricanes that slammed into Texas and Florida - with Hurricane Jose still looming off the eastern U.S. seaboard and Hurricane Maria bearing down on Puerto Rico - also could influence Fed thinking about the timing of the next rate hike, though it is unclear in what direction.

The US Federal Reserve has taken the historic decision to start unwinding its huge $4.2 trillion (£3.1 trillion) portfolio of bonds built up through its stimulus efforts following the financial crisis.

The 10-year yield on Monday touched a almost three-year high at 2.119 per cent.

Investors focused on Fed's policy statement and projections due to be released at 2 p.m. ET (1800 GMT).

Markets will also be watching for clues on the timing of the Fed's next interest rate hike as these tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion. The policy rate also stayed unchanged at 1-1.25%.

Fed officials predicted that inflation would rebound modestly next year, approaching the Fed's target of a 2 percent annual pace. Depsite downward revision in the core CPI for this year, the staff upgraded the economic growth outlook and downgraded the unemployment rate forecast.



Related Posts

This one thing about Apple's new iOS update is annoying people
Each one of these augmented reality apps is available right now in the App Store, and a lot of them are even free downloads. Apparently, users will no longer be able to completely turn off Bluetooth or Wi-Fi on their devices via the Control Center.

David Warner enjoys traveling in Kolkata on rain-hit day
I had to find the right tempo for the game, whether it's hitting boundaries or finding the right time to hit a right boundary. Zampa also showered praise on his Rising Pune Supergiant teammate Dhoni, who played a responsible knock at the other end.

Samsung Galaxy S8 spotted on Geekbench running Android Oreo
A third battleground in software will be augmented reality (AR), or the projection of digital information onto the physical world. While MP-wise it looks similar, Apple's iPhone X has a slight upper hand with nifty features like TrueDepth on the front camera.

India Beat Australia by 26 runs via Duckworth Lewis method
Peter Handscomb, who joined the squad on Saturday, however is available and the team management will take a final call on Sunday. Given his rich experience of first-class cricket, he can only talk about what the Indian spinners can throw at them in the ODIs.

Did You Know? iPhone X was announced
I might regret it in a few months, but let me explain why I chose to go with one of Apple's more traditional iPhones this year. On the camera front, the iPhone 8 gets a 12MP single primary camera, while the iPhone 8 Plus gets a pair of 12MP shooters.

Who Won America's Got Talent Season 12?
That is to say, no big surprise both Simon Cowell and Mel B called the youngster a shoo-in to win the talent rivalry. As for her rabbit puppet Petunia? "It was waterworks right here on this face", she added . "She demanded a nap".

Kurdistan to Hold Independence Vote Despite Regional, Int'l Pressure
Turkish troops dug in on the southern border on Tuesday and turned their weapons toward Kurdish-run northern Iraq . Since 2014, the KRG has been exporting oil to the world via Turkey after cutting Baghdad out of the loop.

Emmys get political; SNL, Westworld receive highest nominations
Baldwin acknowledged that his impression of Trump has been life-changing for him. "It was after the first season in 1976". Morano's win marked the first time since 1995 that a woman has won in that category.

US Fed to announce stimulus drawdown
After the conclusion of its two-day meeting, the FOMC voted unanimously to maintain its interest rates at 1.00 -1.25 percent. The Standard & Poor's 500 index of stocks has risen just 0.08 percent ahead of the Fed announcement at 2 p.m.

Clinton Says Trump 'Gave Permission for People to Be More Sexist'
Yes, Trump is arrogant; but, he galvanized enough voters for him to win the majority of votes in the Electoral College. I am sick and exhausted of hearing people say, "I'm not a racist, but I voted for Donald Trump b...

© 2015 Stocks News Daily. All Rights reserved.