U.S. stocks and Treasuries fell on Dudley’s comments.
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The Labor Department for its part released its consumer price index July report which showed that little had changed since June. Bond prices also inched lower.
“We’re looking for a slightly lower opening today as the dollar comes under pressure”, said Peter Cardillo, chief market economist at First Standard Financial in NY. By leaving interest rates where they are, it has allowed the currency to weaken a bit, aiding manufacturing and energy companies and other exporters.
The Dow Jones Industrial Average fell 0.45% to 18,552.02 points, the S&P 500 decreased 0.55% to 2,178.15 points and the Nasdaq shed 0.66% to 5,227.11 points. Its stock picked up 5 cents to $59.27. Excluding food and energy, the metric was flat over the month and up only 0.8 percent over the year. It was last trading at 94.96, down 0.8 percent on the week.
USA inflation data released today showed a slowing in July for the rate of inflation in the United States economy, this is a further sign of the favourable price pressures that has weakened the need for an interest rates policy change from the Federal Reserves.
The dollar edged away from 7-week lows against the yen and euro on Wednesday following hawkish comments from the Fed officials. Sterling rose to $1.3012 in afternoon trade, compared with $1.2937 before the data was released and recovering from a five-week low of $1.2865 on struck on Monday. Even so, chief executive officer Andrew Mackenzie told reporters on Tuesday that commodity prices are no longer in freefall and Bloomberg calculations show the firm actually saw underlying profit jump 95% to $803 million for the six months ended June 30.
Global benchmark Brent Crude was up 0.10 per cent to $48.40. Oil prices have abruptly reversed course after losses in June and July, and crude is on a four-day winning streak. Brent added 28 cents, up 0.58%, to $48.63 per barrel.
Metals prices also rose.
Spot gold was up 0.5% at $1,345.68 an ounce at 0100 GMT.
Silver was up 1.3% at $20.0735 an ounce.
“For example, the 10-Year treasury yield at 1.5% is pretty low in an environment where we think we are making progress towards our objectives”.
A September interest rate hike is increasingly looking like a pipe dream for the U.S. Federal Reserve, as government inflation metrics failed to move forward in July. Meanwhile the Commerce Department said the pace of home construction grew by the most since February.
Uniform maker Cintas said it will buy G&K Services, a uniform and facility services maker, for 97.50 dollars a share, or 1.93 billion dollars.
Banks also rose, with Mitsubishi UFJ Financial Group gaining 2.6 percent and Mizuho Financial Group adding 2.1 percent. AIG has been streamlining its business and said early this year that it would spin off United Guaranty. Telecom dropped 2.1 percent and utilities were down 1.2 percent. Its stock gave up $4.80, or 5.8 percent, to $77.97.
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“These are a good set of results that build on the recent solid quarterly production data and with the announcement of the restarting of the dividend they draw a line under a very challenging period for the company”, Numis Securities said in a note to investors.
