Inflation -- and rate hike -- fears have investors wary
Inflation -- and rate hike -- fears have investors wary
The Fed’s policymaking body will reveal its decision tomorrowBRENDAN SMIALOWSKI AFP GETTY IMAGES
04 May, 2018, 14:19
The Fed left the interest rate unchanged as expected but made some dovish comments that markets seized upon.
"On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 percent", the Fed's statement said.
Tradables CPI, which includes goods and services that compete with worldwide rivals, fell 0.1 percent in the first quarter and slipped 0.4 percent on the year, keeping headline inflation near the bottom of the bank's 1 percent-to-3 percent range.
"To be fair, the USA economy has historically experienced weaker growth at the start of a new year as consumers front-load spending into Q4 amid the holiday season", Piegza wrote. But unlike in their March statement, Fed officials this time didn't also say that the economic outlook had strengthened in recent months.
The Fed's confidence in the economic outlook was also highlighted by its assertion that business fixed investment had continued to grow strongly.
So far it has been a strong earnings season, with the year-on-year blended earnings growth estimate coming in at more than 25 percent in the first quarter for S&P 500 companies, according to Thomson Reuters I/B/E/S data, while the equivalent figure for the MSCI EMU index (European Economic and Monetary Union) is 14.6 percent in dollar terms. External factors like demand for the Dollar is dictating the majority of swings in the global currency markets, explaining why the Dollar unexpectedly making a turnaround over the previous fortnight has resulted in the Rand moving back to levels not seen since December 2017. Officials indicated in March they expect a total of three or four hikes in 2018.
It held short-term rates unchanged at 1.5% to 1.75%, but that will change, soon, probably at the Fed's meeting in mid-June. We think this further reinforces the case for rates not be hiked at next week's MPC meeting.
In fact the Federal Reserve seemingly hinted that U.S. inflation may be allowed to pass (slightly) above the 2 percent (y/y) target, implying that further rising United States inflation may not become a cause for more aggressive monetary tightening.
Sluggish inflation stood in the way of quicker rate rises previous year, but headline inflation has recently returned to the Fed's target of 2 per cent, leaving policymakers better placed to forge ahead with their rate-lifting plans.
The central bank is meeting as its board is undergoing a makeover, with a raft of new Trump appointees who appear generally supportive of the Fed's cautious approach to rates since the Great Recession ended.
The question remains how quickly and high Jay Powell, the Fed chairman, and his colleagues boost borrowing costs as they attempt to prevent the U.S. from overheating while keeping the economy moving at a steady pace. But interest rates are still at a very low level compared to where they were during much of the 1990s and early 2000s, when interest rates over 4 per cent were common. As the dollar is now in overbought territory, we expect the currency to continue giving up some of its recent gains.
"The Fed's gradual approach to interest rate increases was justified by inflation running below 2 percent, but with inflation now on the cusp of that threshold the Fed may become more proactive about raising rates in an effort to keep inflation contained", Bankrate.com Chief Financial Analyst Greg McBride said.
New data from World Health Organization shows that 9 out of 10 people breathe air containing high levels of pollutants. India also suffers under the weight of the dual burden of ambient and indoor air pollution.
Mr Hunt confirmed work is ongoing between the United Kingdom and Welsh governments to ensure the letters are sent out to everyone. More resources will be made available to ensure the additional screenings are carried out without delay to any patients.
When asked whether targets for removals from the country were set, she replied: "We do not have targets for removals". Some people who do not have the paperwork to prove they are in the United Kingdom legally have been detained.
The Bainco International Investors holds 56,806 shares with $10.44 million value, down from 74,888 last quarter. Greene King plc operates as a pub retailer and brewer in the United Kingdom.The firm is worth 1.70 billion GBP.
He got another par on the drivable par-4 14th but there was no reason to celebrate as he missed his birdie chance from four feet. On Woods' short walk from the driving range to the first hole, it was as if he had his own gravitational pull. 8 and 9.
Flipkart had then announced that it had cash in excess of United States dollars 4 billion on its balance sheet. Softbank now holds over 20% stake in Flipkart and this Walmart takeover will see them making $4 billion.
"I've been made aware that a security engineer now employed at Facebook is likely using privileged access to stalk women online". Facebook won't be given the access it needs if people have suspicions it's being mishandled by employees.
The amends in the policy is expected to spin a new growth tangent for companies that will host IPO and get listed on the HKEC. It operates in more than 70 countries, including India where Xiaomi is the top smartphone company in terms of market share.
According to media reports , Taipei said it was "deeply upset" at the decision, which it blamed on "dollar diplomacy". Beijing has since voiced fears that this may lead to a declaration of independence by the autonomous island.
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