“This reflects an understanding that the Fed isn’t about to raise rates for at least three months”.
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Yellen was asked a version of “Is that true?” four different times today. However, Chair Janet Yellen signaled the central bank still expected one hike this year, with traders betting on December. It is important that we maintain the confidence of the public and I do believe that we deserve it.
With a decision to forgo a hike in its key interest rate on Wednesday – and the US presidential election coming just days after the central bank’s next two-day policy meeting in November – the betting is now on the long-promised re-launch being pushed back to the final month of 2016. Investors doubt the Fed will take action in November, when it meets right before the presidential election, but they think there’s a good chance rates will rise in December. However the central bank said it wants to see more improvement in the job market before raising rates. Platinum at $1,046/1,052 was just $1 higher but palladium at $687/695 was up $10.
Sept 22 (Reuters) – The Nasdaq hit a record intraday high on Thursday amid broad gains in USA stocks, a day after the Federal Reserve stood pat on interest rates.
Amid heavy selling pressure, the 30-scrip sensitive index (Sensex) of the BSE had closed on Wednesday with a loss of 15.78 points or 0.06 per cent on Wednesday, after some volatile trading.
Gold was already firm in earlier trade, along with stock markets, after the Bank of Japan overhauled its monetary policy framework, switching to targeting interest rates and side lining more than three years of massive money printing.
The Fed also projected a less aggressive rise in rates next year and in 2018, fanning expectations bond yields will remain low for the foreseeable future. Gains are led by energy and information technology.
Interest rates can be a primary factor that influences exchange rates, the final determination of a currency’s exchange rate, however does not always follow simple straight-line calculations, but becomes a result of a number of interrelated elements that reflect the overall financial situation of a country. Seoul’s Kospi advanced 0.9 percent to 2,017.94, Sydney’s S&P-ASX 200 gained 0.4 percent to 5,497.40 and India’s Sensex rose 0.8 percent to 28,735.71.
In New York, the Dow Jones industrial average climbed 98.76 points at 18,392.46, while the broader S&P 500 index added 14.06 points at 2,177.18.
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They also noted that the inflation rate was on track to reach 2% and that near term risks were “balanced”. This week, the Fed scaled back tightening plans and the Bank of Japan tweaked its stimulus focus, fueling bets European policy makers will keep their easing stance.
