On Friday, Rosengren said that low interest rates are increasing the chance of overheating the USA economy. Benchmark indexes also closed with their first move of more than 1% since July 8.
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With the Federal Reserve powerless to do much more than it already is, the best route to faster USA economic growth is through non-monetary policy approaches such as immigration and tax reform, a top Fed official argued on Monday.
“In an interview with CNBC, the Republican presidential nominee charged that the Fed was no longer politically independent and instead was pursuing policies to boost Obama in his final months in office”. Investors seized on remarks Friday by Fed Bank of Boston President Eric Rosengren that there’s a case to be made for the US central bank to raise rates sooner rather than later low rates have helped extend the stock market rally.
Several traders said Fed officials hadn’t significantly altered rate increase expectations and central bank concerns were providing an excuse for some investors to move from positions acquired as major USA indexes climbed to record highs this summer.
US VOTE: Clinton’s abrupt departure from a 9/11 anniversary ceremony on Sunday and her medical diagnosis, less than two months before election day, added an extra element of uncertainty to already fragile global sentiment. In a statement, Clinton’s doctor said the former secretary of state had become overheated and dehydrated at the event in lower Manhattan.
The S&P 500’s bank index is up almost 9 percent so far in the third quarter, outpacing the wider S&P’s 1.4 percent advance.
The Dow Jones Industrial Average rose 145 points, or 0.8%, to 18230 and the S&P 500 rose 0.9% after their biggest declines since the United Kingdom voted to leave the European Union.
In a 5,100-word essay released just after midnight, Minneapolis Federal Reserve Bank President Neel Kashkari noted that the US labor market is “closer to normal” but that inflation is still below the Fed’s 2-percent target and economic growth is well below precrisis norms.
ENERGY: Oil futures extended losses.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 1.12 per cent to 939.94 tonnes on Friday. Meanwhile, the CRB Index of 19 commonly traded commodities fell 1.7 percent on Friday, although it is up about 18 percent from its lows in February. Brent crude, used to price global oils, slid 92 cents to $47.09 a barrel.
CURRENCIES: The euro was down 0.1 percent at $1.1225 while the dollar fell 0.7 percent to 101.96 yen.
The euro rose to $1.1242 against $1.1232 in NY, while it eased to 115.28 yen from 115.35 yen.
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A man walks by an electronic stock board of a securities firm in Tokyo, Monday, Sept. 12, 2016.
