“Today’s new normal counsels prudence in the removal of policy accommodation”, said Brainard, a permanent voting member and the last official scheduled to speak ahead of the Fed’s policy-setting meeting on September 20-21.
Advertisement
Over the previous year, Brainard has been one of the Fed’s most vocal defenders of low interest ratepolicy, arguing the United States is vulnerable to economic troubles in Asia and Europe.
U.S. stocks opened lower on Tuesday, as investors kept a close eye on oil prices and pondered over when the U.S. Federal Reserve would hike interest rates. Had she signaled a change of heart, it might have convinced investors that a hike was coming next week, especially after another dove, Boston Fed chief Eric Rosengren, said on Friday that there’s case for higher rates. The 30-year Japanese government bond yielded 0.530 percent, pulling away from a six-month peak of 0.565 percent struck the previous day. The Fed could raise interest rates next week, but investors aren’t sure the economy is healthy enough to handle it.
Retail sales advanced 10.6 percent from a year earlier – again exceeding expectations for 10.2 percent, and fixed-asset investment growth was unchanged at 8.1 percent in the January-August period in an encouraging sign for the world’s second-largest economy. Gold hit a one-week low of $1,320.55 on Monday on initial expectations that Brainard’s comments could prove hawkish, as other Fed speakers have been recently. Food prices account for 19 percent of the consumers price index, the RBNZ’s mandated inflation target. HP rose 14 cents, or 1 percent, to $14.09. Starboard Value said Perrigo needs to make changes to its business, including boosting profit margins for some of its major businesses, and notes that the company’s stock hasn’t done well since Perrigo rejected an offer from Mylan NV. Brent crude, the benchmark for worldwide oil trading, lost 56 cents to $47.76 a barrel in London.
Energy Transfer Pipeline fell 86 cents, or 2.2 percent, to $38.28.
The dollar, which had fallen against the yen before Brainard’s remarks partly on speculation that the Bank of Japan was studying several options to steepen the bond yield curve, briefly extended its loss on the day to more than 1 percent. Telecom was among the worst performers on Friday, declining 3.4%. Hong Kong’s Hang Seng index gained 0.4 percent to 23,384.87.
Against the yen, the dollar slid to 101.72 yen from Monday’s high of 102.82 yen, though it held above last week’s low of 101.20.
Advertisement
Toward 2100 GMT, the euro was at $1.1234, up from $1.1232 at the same time on Friday.
