And Wall Street’s top banks still target September as the most likely time for an initial Fed rate hike, according to another Reuters poll published earlier this month.
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“They don’t want to block themselves into September liftoff, they still want to get another month of data in”, Jennifer Vail, head of fixed-income research in Portland, Ore., at U.S. Bank Wealth Management. They look primed to put up the fed funds rate in September, perhaps December.
But Baumohl says not to bet the farm that we’ll see any rate hike at the next meeting, because so many people have been anticipating an increase for the past year.
Ruskin called the lowered bar for labour-market improvement “dollar-friendly for sure”, but he added that he “suspect(s) that in this whippy summer market the follow-through will be restrained”. That’s not the issue.
The Fed’s statement noted that the labor market has seen “solid” job gains and declining unemployment, household spending has been growing moderately, and the housing market is improving.
The signs of strengthening job gains and expectations of faster growth ahead help explain why the Federal Reserve appears on track to start raising interest rates this year.
“They haven’t made up their minds, but… we’re getting that much closer to satisfying their criteria” for a rate hike, Hanson said.
“The Fed yesterday gave a stronger hint of a sooner-rather-than-later rate hike and the dollar strengthened and that impacts all the commodities”, Citigroup strategist David Wilson said. In its previous statements, there was no modifier the “some“, suggesting Fed officials might stand ready for action on the job market front.
The U.S. Department of Commerce said gross domestic product expanded at a 2.3 percent annual rate.
Part of the slowdown in inflation, though, reflects a plunge in oil prices over the past year, which will reverse itself once energy prices rebound.
As the value of US dollar stabilizes, net exports, which subtracted 1.92 percentage points from the first quarter’s GDP growth, contributed 0.13 percentage point to the growth in the second quarter.
Inflation has been the second condition for raising the rate. Some analysts said the addition of the word “some” was the strongest indication yet that the Fed was creeping closer to a rate rise.
General Dynamics rose 3.93% after its earnings.
Fed Chairwoman Janet L. Yellen has said that she expected an interest rate hike this year but that policymakers would continue to keep rates low for “quite some time” to continue providing support for the economy.
The Center for Popular Democracy has criticized the Fed for not focusing enough on wage improvements as a factor in deciding when to raise rates. He expected the economic growth to average about 2.75 percent from the second quarter to the end of this year.
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After the bell, Expedia jumped 8 percent and Amgen was 2 percent higher, both posting quarterly reports that pleased investors.
