Federal Reserve trimmed its long-term interest rate expectations and the Bank of Japan rebooted its monetary policy framework.
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“It reinforces what the Bank of Japan did today and the scenario that we are now in a world of low rates”.
About 74 percent of 62 economists surveyed by The Wall Street Journal this month believed that the Fed will wait until December to raise rates.
The 10-year US Treasuries yield dropped to as low as 1.608 per cent, down sharply from Wednesday’s high of 1.738 per cent and hitting its lowest level in nearly two weeks.
US short-term interest rate futures trimmed earlier losses and some nearer-term maturities rose on Wednesday.
The S&P 500 was up 0.6%, the Dow Jones Industrial Average jumped 0.5%, and the Nasdaq rose 0.84%.
The Federal Reserve expressed growing confidence in the health of the US economy Wednesday but still declined to raise interest rates, declaring that the case for an increase “has strengthened” but that it would wait “for further evidence of continued progress” toward higher growth and faster inflation.
Aside from the potential for Monday’s USA presidential debate having a big impact on the election, “there’s really nothing on the horizon until earnings season, and the Fed has kind of cleared the way for accommodative policy and low interest rate environment which bodes well for stocks”, said Alan Lancz, president of investment advisory firm Alan B. Lancz & Associates in Toledo, Ohio. It also comes on the heels of an accusation by Republican Party presidential nominee Donald Trump that Yellen is deliberately keeping rates low to help make President Barack Obama look good in his final year in office.
The bank left the benchmark federal funds rate at an ultra-low 0.25-0.50 percent, still above the negative rates of the European and Japanese central banks but well below what the Fed itself had envisioned at the beginning of 2016.
The Standard & Poor’s 500 index rose 11 points, or 0.5 percent, to 2,174.
Spot gold was last at $1,332.35/1,332.75 per ounce, little changed from the previous close after surging to a two-week high of $1,342.15 on Wednesday. It also reduced its longer-run rate forecast to 2.9 percent from 3 percent.
Shares of Amazon.com rose 1.9 per cent to $804.86, after hitting a record following a price target raise by BMO. The dollar fell to a almost four-week low of 100.10 yen on Thursday after the U.S.
US benchmark crude rose 98 cents to close at $46.32 a barrel, while Brent crude, used to price global oils, gained 82 cents to close at $47.65 a barrel.
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Brent crude futures traded at $47.38 per barrel, after having climbed to $47.83 on Thursday.
