January 19, 2018

Rand is marginally weaker ahead of central-bank rate decisions

22 September 2017, 10:47 | Virginia Santiago

Gold Falls Ahead of Fed Meeting

Fed rate hike remains uncertain after Harvey, Irma

Yellen likely has not forgotten the so-called taper tantrum of 2013.

However, elsewhere in the region markets turned lower as traders cashed out. As the BIS said, "transparency about the path of central bank measures may unintentionally encourage greater risk-taking in markets". The European Central Bank, meanwhile, is expected to shed more light on plans to exit its extraordinary stimulus next month.

Anticipation of this week's monetary policy meeting also saw USA bond yields rise in recent days, with investors expecting the Fed will start gradually tightening the money supply. But other regional indexes wavered, with South Korea's Kospi slipping 0.2 percent to 2,406.50.

Since December 2015, the Fed has modestly raised the rate four times.

They also have lowered their long-run forecast for the benchmark interest rate the Fed controls to 2.8 percent, down from 3 percent in a previous forecast in June.

Energy companies rose along with the price of crude oil.

Markets are pricing in a 56 percent probability of the Fed raising rates in December.

Economists expect the storms will put a dent in third-quarter economic activity before provoking a short rebound during reconstruction efforts.

Hurricane Irma Batters Florida With Wind, Rain And Storm Surges
Irma , which made landfall in the Florida Keys yesterday as a Category 4 hurricane , has now been downgraded to a tropical storm . Irma is expected to drop 2 to 5 inches of rain across SC and northern portions of Georgia, Alabama and Mississippi.

The Federal Reserve said the USA economy is strong enough for the central bank to begin reducing its US$4.5 trillion balance sheet in October, gradually unwinding a massive stimulus program started after the economy entered a severe recession almost a decade ago.

This morning the Federal Reserve delivered on its promise to reduce its $4.5 trillion portfolio by allowing $10B in bonds to mature in October, without replacing them. Hong Kong's Hang Seng fell almost 0.4 percent to 28,051.41, while the Shanghai Composite dipped 0.2 percent to 3,356.84. The Fed views the job market as strengthening, but it notes that inflation is running below its 2 percent annual target.

Record-high world stocks paused yesterday and the dollar dipped, as investors waited for signals from the Federal Reserve on when it will start shrinking its balance sheet and nudge up United States interest rates again.

"The hot money was betting on lower for longer from the Fed", he said.

Federal Reserve Chairwoman Janet Yellen on Wednesday warned millions of Americans to scrupulously monitor their credit reports following a "very serious data breach" at Equifax. "As such, we will take further monetary easing steps if necessary", its Governor Haruhiko Kuroda said at his post-meeting news conference.

The Dow Jones industrial average rose 0.28 percent, or 63.01 points, to close at 22,331.35 - its fifth consecutive record close.

Investor focus will shift to the Federal Open Market Committee's two-day meeting, which starts on Tuesday.

The Fed is due to announce its decision at 1800 GMT on Wednesday and is widely expected to keep rates unchanged after a two-day meeting but could begin paring its bond holdings, with reductions likely to start in coming months.

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