Gold prices have reached levels last seen in August, as investors prepare for an interest rate hike in December.
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Weekly jobless claims came in at 276,000, above expectations.
Several other top Fed officials, including Vice Chair Stanley Fischer and Federal Reserve Bank of NY President William Dudley, have also signaled that it will be appropriate to raise interest rate this year as the job market continues to improve.
Eleven participants said their conviction around a December hike has increased in the last month.
The likelihood of a rate hike in December was given further credence with Janet Yellen’s remarks overnight.
“Our trade performance net exports is soft but the committee judged in October that a few of the downsides had diminished relating to global economic and financial developments”, said Yellen, who heads the equivalent of a central bank.
“Although the Fed has been hinting towards an interest rate hike in December ever since the FOMC September meeting, market behaviour was showing that they just refused to believe what the Fed says”, MIDF said.
When Yellen was asked about the outlook for monetary policy on Wednesday, she could have avoided the question. “The committee’s expectation is that will be a very gradual path and of course will depend on the actual performance of the economy”.
Short-term rates near zero also might be discouraging banks from lending.
“The improvement in the labor market has been extremely steady”, Brainard said at a conference in Germany. During her comments, the dollar hit its highest level against the euro since late July and set a two-month high against the Japanese yen. Third-quarter productivity increased at a 1.6 percent annual rate, while labor costs rose 1.4 percent.
US private employers maintained a steady pace of hiring in October and a jump in new orders buoyed activity in the services sector, suggesting the economy was strong enough to support an interest rate hike from the Federal Reserve in December. “A third sub-200,000 reading is unlikely to reinforce optimism for an end of the year rate increase”, noted Lindsey Piegza, chief economist at Stifel.
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Russ Mould, investment director at AJ Bell said: “A bumper non-farm payrolls figure of 271,000 demolishes the consensus estimate and paints an upbeat picture of the United States economy, especially as wage growth crept higher to 2.5%”.
