Her remarks to the Chicago Council on Global Affairs sent stocks soaring, recouping almost half the losses incurred Friday when remarks by other Fed figures sparked fears the Fed’s Open Markets Committee would hike interest rates at next week’s meeting. After a market nosedive on Friday, investors are putting money into safe-play investments like household goods makers and phone companies.
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US Federal Reserve interest rate committee members disagreed on whether the American economy and inflation were strong enough to soon tighten monetary policy, as financial markets on Wall Street rallied on Monday after a sharp global sell off.
In a speech earlier Monday, Dennis Lockhart, head of the Fed’s regional bank in Atlanta, said he still held the view he expressed last month at a Fed gathering at Jackson Hole, Wyoming: That economic conditions justified consideration of a rate hike in September. Banks took the smallest losses on the market Friday as investors speculated that interest rates might start rising soon.
The BOJ is expected to unveil the results of a comprehensive review of its policy it had promised in July, in which many market players believe the central bank will indicate its preference for a steeper yield curve to cushion the blow on banks from negative interest rates.
Fed Chairwoman Janet Yellen will spend the week before the central bank’s September 20-21 policy meeting conferring behind the scenes with 16 officials to listen to their views and plot out a plan for the meeting. But the federal government temporarily stopped the project and several agencies said they will reconsider some of their decisions. The Standard & Poor’s 500 index rose 31.23 points, or 1.5 percent, to 2,159.04.
That would support further recovery in US stocks Tuesday from Friday’s sell-off.
The South Korean company will also be selling its printer business to HP, in a acquisition deal valued at $1.05 billion. Elsewhere, Apple rose $2.30, or 2.2 percent, to $105.43 and communications chip maker Broadcom picked up $3.63, or 2.3 percent, to $164.41.
FERTILE SOIL: Canadian companies Agrium and Potash Corp. of Saskachewan agreed to combine into the world’s largest crop nutrient company.
A quarter-percentage-point increase, he added, would be a “drop in the bucket”.
“Quite why the market was getting so beared up is beyond us – as Brainard points out, USA inflation remains “noticeably below our 2 percent target”, and there is ‘greater slack than previously anticipated, in the jobs market”, ANZ Bank New Zealand senior rates strategist David Croy said in a note.
Against the yen, the dollar inched up 0.1 percent to 101.96 yen, after falling 0.8 percent on Monday. The FTSE 100 index of leading British shares gave up 1.1 percent.
European stocks followed the big losses on Monday recorded in Asia and Australia, including the local S&P/ASX 200 losing more than $30 billion or 2.24 per cent, its worst day since Brexit. In Hong Kong, the Hang Seng (Hong Kong Stock Exchange:.HSI) index gained 0.87 percent.
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USA stocks plunged about 2.5 percent Friday, their biggest loss in two months, after Federal Reserve Bank of Boston President Eric Rosengren said there’s a case to be made the US central bank should raise rates sooner rather than later.
