US Fed chairman Powell hints at higher rates following Trump attack

Share
US Fed chairman Powell hints at higher rates following Trump attack

A day after President Donald Trump's latest attack on the U.S. central bank, Federal Reserve chief Jerome Powell hinted Wednesday the key lending rate would move higher but said there was no preset course. Jerome Powell's speech essentially said the economy is doing well, and asset prices are not in a bubble, but that rates are close to "neutral" although people dispute what that is, according to Nicholas Frappell, global general manager at Sydney-based ABC Bullion.

The Fed's dot plot implies three interest rate hikes in 2019. But signs of a slowdown overseas and almost two months of market volatility - including a sharp selloff last week - have clouded an otherwise mostly rosy US picture in which the economy is growing well above potential and unemployment is the lowest since the 1960s.

"The 10-year note is perched at a critical level", said Chris Ahrens, chief market strategist at First Empire Securities in Hauppauge, New York.

The Bloomberg Dollar Index sank the most in two weeks, fueling speculation its two-month rally may be over.

The benchmark 10-year bond yield was at 7.60 per cent by 0340 GMT or 9:10 am IST, down 4 basis points on the day and at its lowest level since May 8.

Sterling was last trading at $1.2784, down 0.31 percent on the day, after Bank of England Governor Mark Carney warned a disorderly Brexit could trigger a worse economic downturn for Britain than the financial crisis.

The Fed chief said in his speech that interest rates remain "low by historical standards" and still provide stimulus to the economy.

Still, some say the Fed will continue hiking.

Global equity bulls were instilled with a renewed sense of inspiration on Thursday after dovish remarks from Federal Reserve Chair Jerome Powell boosted risk appetite. "Now investors are true believers - and are reacting accordingly".

Powell has dismissed the unprecedented political attacks from Trump, saying they have no influence on deliberations of the independent central bank.

"If Trump were able to get those additional concessions from China at this meeting, and announce certainly no trade deal, but. a commitment to further negotiations to work towards a deal and in the interim not see further escalation, then that's something markets would latch onto", Page added.

Terminal subscribers can read our Markets Live blog.

Gold watchers will be placing a keen eye on the outcome of the G20 summit, particularly on the reports emerging from the President Trump and Xi meeting.

Wall Street was set for a weaker open with S&P 500 and Nasdaq futures down 0.2 to 0.5 percent after Trump struck an uncompromising tone on trade. NY time, the biggest three-day gain since June.

For the week, the Dow rose 5.16 percent, registering its biggest one-week gains since November 2016.

US crude rose 2.31 percent to $51.45 per barrel and Brent closed at $59.51, up 1.28 percent on the day.

The Stoxx Europe 600 Index was little changed.

The dollar index against a basket of six major currencies was effectively flat at 96.805 following an overnight loss of 0.6 percent.

The euro was up 0.7 percent to Dollars 1.1367.

Share

Advertisement

Related Posts

'Beast Pac-Man': Khashoggi's private messages show growing fear of Saudi Prince
For decades he was close to the Saudi royal family and also served as an adviser to the government. However, US President Donald Trump has cast doubt on the Central Intelligence Agency report.

River Plate Refuse To Play Libertadores In Madrid
Earlier River announced they were refusing to play the game in Madrid while Boca are planniong to appeal the switch to Spain. FIFA President Gianni Infantino said he wasn't aware of the club's decision.

Deepika And Ranveer Make A Spectacular Entry At Mumbai Reception
The celebrations didn't end there, as Ranveer and Deepika hosted two receptions for friends and family on November 21 and 28. The couple kept very tight security around the wedding venue and shared the first pictures on the second day of the wedding.

Gene-Edited Babies Would Just Be Repeating Nature's Experiment
When the girls were still embryos, he used chemical "scissors" to turn off a gene that makes people vulnerable to HIV infection. He also spoke about his research with organizers of an worldwide conference on gene editing in Hong Kong , the AP reported.

Rockstar Games breaks down the ins and outs of Red Dead Online
Rockstar has also confirmed a plethora of Red Dead Online details, and what outlaws can experience with friends in the Wild West. Currently, the beta is going and we're learning a lot more about Red Dead Online's structure such as its lobby size.

Qatar pulls out of Opec oil producers' cartel
Qatar, a country of 2.6 million people, discovered the offshore North Field in 1971, the same year it became independent. Yes, for now, there is optimism that Saudi Arabia and Russian Federation are committed to keep the supply under control.

The Brexit legal advice that could see Britain trapped in customs backstop
The left-of-center party says it will vote against the deal. "I believe that we can win the argument and win the vote. Gove told the BBC Sunday that if ministers don't pass the bill "the alternatives are no deal or no Brexit".

George H.W. Bush to lie in state at the Capitol
Sitting presidents often don't go to services for former first ladies; Melania Trump represented her husband. In his last hours, Bush was asked whether he wanted to go to the hospital, according to a source familiar.

Iran says missile programme 'defensive', after testing rocket 'capable of hitting Europe'
The European parties to the nuclear deal have refused to pull out and said they would seek ways to continue trade with Iran. Secretary of State Mike Pompeo said Saturday could strike parts of Europe and anywhere in the Middle East.

Lennox Lewis blasts judges after Tyson Fury is denied stunning comeback win
In addition, SHOWTIME BOXING: SPECIAL EDITION will stream live on SHOWTIME Sports social channels beginning at 7:45 p.m. Unfortunately for Fury and his fans, however, this was not the case with the fight being deemed a controversial draw.

© 2015 ExpressNewsline. All Rights reserved.