US stocks opened higher for the first time in three days on Tuesday as investors await Federal Reserve Chair Janet Yellen’s speech this week for clues on the next interest rate hike.
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Gold was steady in the face of more gains for equities ahead of Friday’s meeting of central bankers at Jackson Hole, Wyoming.
Of the Fed’s 17 policymakers, 10 have a vote on the rate-setting committee.
That compared to six in June, showing growing confidence among Fed policymakers in the US economic outlook.
With only three policy meetings left in the year, investors wonder whether it has dug itself into the sidelines.
Prices for Fed funds future contracts suggest investors see nearly no chance for a rate increase at the September or November meetings and roughly even odds at the last meeting of the year in December.
“She has a tough job”, St. Louis Federal Reserve President James Bullard told reporters last week. My own expectation is that they’ll remain on the side of caution and won’t move in September, but we’ll have to see. They pegged the chances of a December rate increase at 57% on Tuesday, compared with around 50% the previous day, the data showed.
That was roughly the same outlook each camp had a year earlier in December 2014.
“We continue to expect the Chair to leave the door open on a 2016 rate hike, while more heavily emphasizing the need for additional rate hikes in 2017 and beyond”, she added.
NEW YORK – World shares crept up on Tuesday with a boost from housing sectors while the dollar lost ground as investors awaited further clues on whether the Federal Reserve will raise USA interest rates this year. Yellen’s speech will be closely watched to see if she too takes a more upbeat tone, and for any new indications on when the US central bank is likely to raise interest rates again.
Yellen has sought to move the Fed away from its so-called “forward guidance” approach, a communication tool that was used to provide reassurance that monetary policy would remain accommodative.
The greenback was given a boost over the weekend when Fed Vice Chairman Stanley Fischer said the USA central bank was getting close to its employment and inflation targets, prompting speculation a rate hike could come next month.
Otherwise, investors will keep doubting future rate increases, he said.
But I think investors should be aware that the September meeting will be a live one, meaning a rate hike is not out of the question.
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“I am mystified at what the short-term futures market is looking at”, he said. At the current moment, all eyes are on Yellen’s speech, which follows hawkish rhetoric from various Fed officials over the last week. This news story is related to Print/144709-Investors-skeptical-of-Feds-ratepolicy-ahead-of-Yellen-speech/ – breaking news, latest news, pakistan ne.
