But three members of the Fed’s 10-member policymaking committee voted to raise the benchmark rate, the largest number of dissents since December 2014. For instance, the unemployment rate has remained at 4.9 percent for the past three months, and that’s up from 4.7 percent in May. The Nasdaq composite rose 31 points, or 0.6 percent, to 5,272.
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The Fed said US economic activity had picked up and job gains were “solid” in recent months.
The independent bank regulatory agency, which is operated by the major banks with some federal input, said Wednesday the USA job market has continued to strengthen and economic activity has picked up.
The Reserve characterized risks to its economic outlook as “roughly balanced”.
The U.S. central bank is widely expected to hold interest rates unchanged at 0.25 percent to 0.50 percent, and could hint at a rate hike by the end of the year. Most analysts have said they think the Fed will next raise rates in December.
“That really stands out that they’ve become significantly more dovish in their projection materials, but clearly trying to signal to the market that December is very much live”, David Keeble, New York-based head of fixed-income strategy at Credit Agricole, told Bloomberg. Fed leaders generally prefer votes that are unanimous or almost so – to foster confidence among investors that it’s pursuing rate policies that command broad support.
Yesterday afternoon the central bank noted that while the case for an interest rate hike has strengthened, the Fed has decided “for the time being to wait for further evidence of continued progress toward its objectives”.
Since lots of consumer and business rates are linked to the federal funds rate, holding steady means vehicle loans, many variable rate mortgage loans, the prime rate for business lenders – all those rates won’t go up either. Potentially, analysts said, the rate increase may come during committee’s December 13-14 meeting, since the one in November comes just ahead of the USA presidential elections.
Fed Chair Janet Yellen did say US growth was looking stronger and rate increases would be needed to keep the economy from overheating and fuelling high inflation.
Others said that members of the dove camp, who include Yellen, weren’t yet convinced, especially after the recent string of tepid readings on the economy.
While median household income jumped 5.2 percent a year ago, job growth has slowed somewhat. A manufacturing gauge slid back into recession territory.
The company’s strengths can be seen in multiple areas, such as its solid stock price performance and largely solid financial position with reasonable debt levels by most measures. USA shoppers retreated in August to depress retail sales after four straight monthly gains. They think policymakers want more time to evaluate the health of the US economy, measure global risks and gauge whether inflation will soon reach the Fed’s 2 percent target rate.
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This post was syndicated from BusinessDay: News you can trust. It promised to keep expanding the nation’s money supply until inflation surges above 2 percent for an unspecified time.
