WASHINGTON―The case for raising United States interest rates remains less than convincing, given weak inflation and current under-employment levels, influential Federal Reserve Board Governor Lael Brainard said Monday.
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Taiwan’s Taiex index lost 0.1 per cent.
The dollar, on the other hand, nursed losses against its peers after Brainard reiterated her dovish views and warned against a rush to raise rates. Brainard did not comment on the specific timing of future rate policy changes but she held firm in arguing for caution in what could be the last word from a Fed policymaker before the central bank’s September 20-21 meeting. The losses Friday wiped out two months of gradual gains on the market.
While some investors had speculated that Brainard would switch over to the more hawkish camp, the Fed governor said Monday she wanted to see a stronger trend in USA consumer spending and evidence of rising inflation before the Fed raises rates. FOMC members’ public comments on interest rates indicate that neither side has a clear lead, suggesting that Yellen’s judgment will carry much weight. Higher rates threaten stocks by making interest-paying savings accounts and bonds more attractive to investors.
Retail sales advanced 10.6 percent from a year earlier – again exceeding expectations for 10.2 percent, and fixed-asset investment growth was unchanged at 8.1 percent in the January-August period in an encouraging sign for the world’s second-largest economy. Brent crude, the benchmark for global oil prices, rose 35 cents to $47.45 a barrel in London. Elsewhere, Apple rose $1.34, or 1.3 per cent, to $104.47 and Broadcom picked up $3.18, or 2 per cent, to $163.93. Verizon shed $1.31, or 2.5 percent, to $51.26 and AT&T fell 85 cents, or 2.1 percent, to $39.86. November Brent crude on London’s ICE Futures exchange fell 34 cents, or 0.7%, to $47.98 a barrel. “They are still very nervous about the process of normalization”, he said in a Bloomberg TV interview.
After Fed official Lael Brainard, stated the US economy should manifest more signs of stability so they could increase the appreciation of the dollar in comparison with other currencies. The euro was flat at $1.1234, while the dollar index stood little changed at 95.155 after losing about 0.2 per cent the previous day. Spot silver is trading at $18.95, 15 cents lower, playing above and below the $19 mark. In Australia, the index for September rose 0.3%, well below the 1.0% rise seen. traded at 0.7480, up 0.20%.
OVERSEAS: Germany’s DAX lost 0.3 per cent while France’s CAC-40 slipped 1 per cent.
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The yield on the benchmark 10-year Treasury note rose more than 2 basis points to 1.691 percent, the yield on 5-year bond bounced 1 basis point to 1.234 percent and the yield on short-term 2-year note also climbed 1 basis point to 0.798 percent by 12:00 GMT.
