Online Broadband Guide
Online Broadband Guide

Gold Prices Stick in the Range: Undeterred by Rate Hike Fears

Gold Prices Stick in the Range: Undeterred by Rate Hike Fears

The Federal Reserve said the economy's continued growth might convince it to raise its benchmark interest rate soon, according to minutes from its January policy meeting released Wednesday, even as it acknowledged that the ambitious policies proposed by the Trump administration could have unforeseen effects on the USA economy.

The central bank economists state the decision to keep the funds rate steady comes after the economy did not meet the Fed's goal of 2 percent inflation set last December.

Other markets: Asian markets mostly rose ( with the Hong Kong Hang Seng Index up 1%.

Still, many of them said "it might be appropriate to raise the ... rate again fairly soon" if the economy continued to improve as expected, according to minutes of the Jan 31-Feb.

What it means: As interest rates normalize and the economic expansion matures, the Fed expects to stop reinvesting the proceeds of maturing bonds and mortgage debt, a step that would begin to shrink the huge amount of liquidity the central bank forced into the economy by buying the securities after the 2008 financial crisis. However, consumer spending for energy services declined markedly, reflecting unseasonably warm weather.

"A few participants noted that continuing to remove policy accommodation in a timely manner, potentially at an upcoming meeting, would allow the committee greater flexibility in responding to subsequent changes in economic conditions", the minutes said.

Fed officials also emphasized the uncertainty surrounding the Trump administration's policies.

That statement will add to rising expectations the FOMC might increase the benchmark rate at the March 14-15 meeting. Sentiment indicators are also up on the expectation that President Donald Trump will boost growth through fiscal measures and deregulation.

The broad-based S&P 500 had dropped 0.3 percent to 2,358.39, while the tech-rich Nasdaq Composite Index fell 0.3 percent to 5,848.65. Interest-rate increases, meanwhile, tend to strengthen the dollar, which can make USA exports costlier to buyers and hurt American manufacturers.

Both of these policies, said Yellen, could produce drags on the U.S. economy and would factor into the decisions regarding monetary policy for the Fed as their effect became clearer. In the January statement the FOMC repeated that reinvestments would continue until rate normalization is "well under way".


editors' picks

February 22, 2017
Interserve PLC upgraded to Hold By Peel Hunt
In other news, insider Keith Adey sold 4,800 shares of the firm's stock in a transaction on Monday, November 28th. Over the last twelve months Interserve PLC's share price has increased from 0.00 to 228.02, changing by 0%.

February 22, 2017
Macy's Profit Drops 13% As Store Closures, Layoffs Take Their Toll
Adjusted earnings are expected between $2.90 to $3.15 a share, bracketing the average analyst estimate for $3.05 a share. Excluding impairments, store closings, settlement charges and other costs, per-share profit fell to $2.02 from $2.09.

February 21, 2017
X-23 Spin-Off Movie Possible
God knows how I'll feel in three years. "I am very excited to be here, to me it is the flawless place for a world premiere". But then he opened the door for a fresh X-Men spin-off, centred on the X-23 character who is introduced in the new film.

February 20, 2017
Lana Del Rey Returns with New Single "Love"
The song is the singer's first release since her last LP, Honeymoon, which bowed in September 2015. The song is now available on iTunes/Apple Music, the Google Play Store, Spotify, and YouTube .

February 18, 2017
Powerful storm prompts flood, surf, and wind warnings in SoCal
High wind warnings have been issued for portions of San Bernardino and San Diego counties. "The storm looks to be the strongest storm to hit southwest California this season".

February 17, 2017
Kevin Love's replacement has been found for NBA All-Star game
Love, 28, underwent a scan on the knee on Sunday after experiencing pain in the joint during Saturday's 125-109 win over Denver. When Love returns, he will have eight to ten games left in the regular season to shake the rust off his game.

February 16, 2017
Smith dreams of unexpected India triumph
Should South Africa win their series 3-0, Australia would need to win the Border-Gavaskar Trophy. Virat Kohli is going to make sure that he has the best XI to face the Aussies.

February 16, 2017
Real Madrid Vs. Napoli Live Stream
Defender Nacho Fernandez said that no players can lose at Real Madrid now that Coach Zinedine Zidane is a part of the team. Hardly a realistic prospect considering they have only kept one clean sheet in their last 10 Champions League away games.

February 15, 2017
Producer Prices Rose 0.6% in January
Excluding just food and energy the year-on-year rate of increases in core producer prices fell back from a 1.6% clip to 1.2%. Those costs feed into the Fed's preferred inflation measure, the core personal consumption expenditures index.

February 14, 2017
Zverev downs Gasquet for Montpellier title
This included their rakings with Zverev (World No. 21) ranked a spot higher than Gasquet (World No. 22). He squandered all three with several loose errors but gained a fourth match point thanks to an ace.