Stock market investors are not excited about a rate hike – the Fed’s near-zero interest rate policy has been a big reason stocks have enjoyed a 6-year bull market upswing.
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Short-term Treasury yields jumped Wednesday to their highest level in four years, after Federal Reserve chief Janet Yellen said a December interest-rate hike could be appropriate.
In testimony to Congress, Yellen said a rate hike this year was a “live possibility”, underpinning the Fed’s comments after its October meeting last week.
God wants the Federal Reserve to delay raising interest rates until next year, Representative Brad Sherman revealed on Wednesday.
Friday’s employment report is considered the most important element that could weaken or strengthen the case for a December interest-rate hike.
A few of the biggest gainers on Monday and Tuesday were among the biggest decliners on Wednesday.
After gaining more than 8% last month, USA stocks have enjoyed back-to-back rallies to kick off November, a surge that has catapulted the Dow Jones industrial average back into positive territory for 2015, positioned the Standard & Poor’s 500 to within 1% of a new record close, and pushed the small-company Russell 2000 out of correction territory.
“This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and worldwide developments”, the FOMC continued. ADP said USA private employers added 182,000 jobs in October, beating the consensus forecast of 180,000 from economists in a Reuters poll, while the government reported the US trade deficit narrowed sharply in September to a seven-month low. The euro weakened to $1.0867 from $1.0966.
A host of Fed policymakers are scheduled to speak on Thursday, including Fed Vice Chair Stanley Fischer, New York Fed President William Dudley, Chicago Fed President Charles Evans and Atlanta Fed President Dennis Lockhart. The reading could push third-quarter GDP estimates slightly higher. “But importantly, we’ve made no decision about it”.
Media companies were another weak spot in the market.
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“If we were to move, say in December, it would be based on an expectation, which I believe is justified, that with an improving labor market and transitory factors fading that inflation will move up to 2 percent”, Yellen said.
