In an interview last week, San Francisco Fed President John Williams argued that gradually raising rates soon would help mitigate the danger of abruptly increasing them later.
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“The fear of the market is that they may raise at the wrong time”.
The Dow Jones industrial average rose 21.92 points, or 0.1 percent, to 18,573.94.
The minutes showed officials were divided in July over the urgency to raise interest rates again, with some preferring to wait because inflation remained benign and others wanting to go soon as the labour market nears full employment.
ANALYST’S TAKE: “There is clearly strong disagreement within the Fed with regards to the timing of further rate hikes”, said Angus Nicholson of IG in a report.
Valeant gained 12 per cent, Pure Industrial REIT rose almost 4 per cent while Barrick Gold slid 2.2 per cent and Goldcorp was off 1.7 per cent.
Weighing on sentiment were disappointing results from Target, down 6.1% as of 3.16pm in NY, as well as from Lowe’s, down 5.5%.
New York Fed President William Dudley and Atlanta Fed President Dennis Lockhart have also in recent days made the case that the U.S. economy is in good shape and that the Fed should soon restart an expected run of gradual rate hikes that it began last December but shelved amid financial market turmoil and fears of the effects of a slowdown in China and Europe.
The Aussie rose 0.1 percent to 76.65 US cents ahead of Australian data forecast to show 10,000 jobs were created in July and the unemployment rate held at 5.8 percent. Target is down 7 percent and Lowe’s is down 6 percent after each company cut its profit outlook.
“Several suggested the committee would likely have ample time to react if inflation rose more quickly than they now anticipated, but they preferred to defer another increase until they were more confident inflation was moving closer to 2% on a sustained basis”, according to the minutes of the Federal Open Market Committee’s meeting. If labor market conditions tightened so much that inflation pressures jumped, the Fed would have to respond with a more rapid series of rate hikes that could jeopardize the recovery.
Benchmark copper on the London Metal Exchange extended gains to be up 1 per cent at $4,824 a tonne after losing 0.8 per cent on Wednesday.
Brent traded at $50.42 a barrel, up 56 cents on the day. That would extend the slide in earnings to a sixth period, the longest since the financial crisis. Phone companies, raw-materials and consumer-discretionary stocks led declines.
After starting the day on a subdued note, gold and silver remained weaker throughout the day amid a recovery in the U.S. dollar.
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The Fed has met the first goal and is nearing the second, he said. Newmont Mining Corp. and Freeport-McMoRan Inc. sank more than 0.6 per cent. “We have had conflicting statements from the Fed and its created quite a lot of confusion as to the thinking, so now the market is waiting to hear what Yelland’s thoughts on the world and economic growth”, Ole Hansen, head of commodity strategy at Saxo Bank.
