Stock market investors have piled in after the US Federal Reserve confirmed it would wait longer to lift interest rates.
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The BoJ decision was made in response to problems that arose following policies announced earlier this year. He believes that the anomalies in the May payrolls number was miscommunicated and suggests the Fed could still have hiked in the summer despite the shock result of the United Kingdom referendum on its European Union membership.
The Fed left interest rates unchanged and projected a less aggressive path for hikes next year and in 2018.
The Australian dollar has gained nearly one US cent after the US Federal Reserve decided against raising interest rates, while the new head of the Reserve Bank of Australia indicated there is little chance it will cut rates in the short term.
“The Fed probably appeared less hawkish than what the markets had expected”, said Ryan Larson, head of equity trading at RBC Global Asset Management in Chicago. The yield on the U.S. Treasury 10-year note fell to 1.61 percent from 1.67 percent the day before. The Nasdaq Composite Index increased 53.83 points, or 1.03 per cent, to 5,295.18, Xinhua news agency reported.
The FOMC also signalled that the case for a hike later this year has strengthened, saying inflation was on track to reach the 2% target and near-term risks were “balanced”.
Real estate companies rose as investors looked for income, as did telecom stocks, which also typically pay higher-than-average dividends.
She played down concerns that the Fed’s easy monetary stance was fuelling bubbles in the financial markets and the economy.
The major gainer against the dollar was the Norwegian crown NOK=, which rose more than 2 percent after Norway’s central bank left its main interest rate unchanged and suggested further rate cuts may not be needed because of a pickup in the economy. It expects the economy to expand just 1.8 percent this year and by an nearly equally sluggish 2 percent in 2017 and 2018. Yellen said Fed policymakers were “struggling” with a hard set of issues over what is the “new normal” in the USA and global economy.
The meeting of the USA central bank’s key committee came well past the closing bell at Indian bourses.
Fed Chair Janet Yellen, speaking after the central bank’s latest policy statement, said USA growth was looking stronger and rate increases would be needed to keep the economy from overheating and fueling high inflation.
Yellen made clear, however, that any interest rate rises in the future would be gradual and monetary policy would remain accommodative.
Reserve Bank of New Zealand struggling with too-low inflation. Palladium added 0.2 percent, while silver fell 0.6 percent.
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The policymakers also forecast that inflation will almost reach the Fed’s target next year before achieving 2 percent in 2018 and 2019.
