Yellen described the economy performing well and said that she continues to see solid growth in domestic spending. Yellen was quick to add though that at this time, no decision had been made on whether the interest rates would indeed go up at the Federal Reserve’s final policy meeting in December, but it was definitely still a live possibility.
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Shaking earlier losses after unexpectedly weak data on US jobless claims, the dollar rose 0.1 percent against the yen to 121.71 yen and was up 0.2 percent against the euro to $1.0886.
“The improvement in the labor market has been extremely steady”, Brainard said at a conference in Germany. Like Dudley, Fischer did not comment on the outlook of the U.S. economy or monetary policy. “Fed officials appear to be setting up for the move”.
The rate has been locked extraordinarily near zero since 2008 to foster economic growth.
Higher rates increase borrowing costs for companies, while a rise in the dollar hurts their income from overseas markets. Part-time workers who want full-time work and people who haven’t actively sought work in the past month are more plentiful than they were before the recession.
The Dow Jones industrial average fell 4.15 points, or 0.02 percent, to 17,863.43, the S&P 500 lost 2.38 points, or 0.11 percent, to 2,099.93 and the Nasdaq Composite dropped 14.74 points, or 0.29 percent, to 5,127.74. A bit of inflation is good, since it tends to raise wages and prices, but too much can be a bad thing. When we moved our rate hike assumption to March 2016, we assumed that the volatility in financial markets would be longer lasting and the Fed would have trouble resolving their differences about the viability of rate hikes before year-end.
While the government’s monthly jobs report is always important to investors, there is additional focus on this month’s report. There’ll be another jobs report before December’s meeting.
So, it turns out that Janet Yellen actually may have tipped her hand about a strong payrolls report after all.
“This is a big piece of data as to what the Fed is looking for”.
Traders were still digesting those remarks and “keeping the powder dry” in anticipation of Friday’s payrolls numbers, said Karl Schamotta, director of FX strategy and structured products at Cambridge Global Payments in Toronto.
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The USA stock market ended Thursday’s trading slightly lower as investors were hesitant to make any large bets before the release of the government’s closely watched jobs report, out Friday. The state of the economy, not the time of year, is what counts.
