January 19, 2018

Fed Stands Pat On Rates, Will Reduce Balance Sheet In October

22 September 2017, 10:33 | Virginia Santiago



Several packaged food companies also declined. Brent crude, used to price worldwide oils, gained 55 cents to $55.69 per barrel in London.

Canadian Natural Resources rose 2.4 per cent to C$41.44, while Encana Corp advanced 4.5 per cent to C$13.69. Hong Kong's Hang Seng index added 0.4 percent. However low inflation remains a concern, with Yellen admitting the Fed does not fully understand why price growth hasn't picked up pace, still well short of the central bank's two-percent target. Japan's Nikkei 225 index was up 1.72 percent just after midday. "But it also cut its long-term interest rate projection and this has somewhat slowed the dollar's gains versus the yen by causing the USA yield curve to flatten", said Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo. But they predicted that inflation would not rise above that 2 percent target, even though they expect unemployment to remain well below the level that would usually result in inflation. It was up 0.7 per cent for its biggest one-day increase since Aug 4 at 92.426.

"You just had that little momentum spurt after it went through 2,500 but it is kind of running out of steam and is going to bide its time until Wednesday, when they listen to (Fed chief) Janet" (Yellen), said Ken Polcari, director of the NYSE floor division at O'Neil Securities in NY.

The New Zealand dollar gave up earlier gains after the US Federal Reserve announced a plan to start shrinking its balance sheet and signalled one more rate hike later this year, remaining rangebound ahead of Saturday's general election.

The major USA stock indexes closed mostly higher Wednesday, led by gains among banks as bond yields rose.

The Fed said it would start winding down its vast, $4.5 trillion balance sheer in October. That helped put more downward pressure on interest rates that supported borrowing and helped boost the economy.

Injuries: TJ Watt (groin) questionable to return
Then again, he was playing against the Saints defense , and the Steelers have a solid front seven that can take the run game away. The Vikings' aggression on special teams didn't come without some regret. "When we scored, I saw the (play) clock go to 40".

Interest rate futures traders are now pricing in a 72-percent chance of a December rate hike, up from roughly 60 percent before the statement, according to the CME Group 's FedWatch Tool. They now expect there will likely be two hikes, down from three. What wasn't known was the tone.

"Investors have a tendency to stay on the sidelines ahead of the Fed and other important events, so that trading becomes more technical", ABN Amro analyst Georgette Boele said.

Both the Dow and S&P 500 fell following the Fed statement but reversed those losses to end the session slightly higher and add to a string of closing records. The Nasdaq composite index edged down 5.28 points to 6,456.04.

The S&P's financial sector ended 0.6 per cent higher as banks benefit from higher rates. Australia's S&P/ASX 200 fell 0.1 percent.

In late NY trading, the euro fell to 1.1895 dollars from 1.1998 dollars in the previous session, and the British pound lost to 1.3485 dollars from 1.3523 USA dollars in the previous session.

Advancing issues outnumbered decliners on the NYSE by 1,809 to 968. USA stocks were little changed.

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