Dollar subdued as Trump probe, weak USA data overshadow Fed
15 Juin, 2017, 16:49 | Author: Marc Bacque
The PBOC is also keeping a close eye on seasonal liquidity tightness, and has moved to inject large amounts of funds to ease worries about another cash crunch like that in June 2013, when sent money market rates skyrocketing.
While the market seems to interpret rate hikes as too hawkish from an inflation perspective, one could make the case they are too dovish given low unemployment rates. With today's action, the Fed has hiked rates four times since December 2015, for a total of 100 bps, the practical minimum for the central bank to pass its self-imposed test. The market is expecting one more rate hike by the Fed in the current fiscal year.
The rate hike and the accompanying decision to ramp up the pace of Fed's balance sheet reduction implied that the United States economy was growing, said Julian Tarrobago, who manages $1.9 billion in assets for ATR Asset Management.
"Information received since the federal open market committee met in May indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year", the Fed said in a statement.
But the estimate for the central bank's preferred measure of inflation, the PCE price index, was cut three-tenths to 1.6 percent, while the core PCE, which excludes volatile food and energy prices, was cut two-tenths to 1.7 per cent, according to the Summary of Economic Projections.
And the most important pillar of the economy - the job market - remains solid if slowing, with unemployment at a 16-year-low of 4.3 per cent - even below the level the Fed associates with full employment.
Against that backdrop, Treasury yields rebounded slightly (http://www.marketwatch.com/story/treasury-yields-rise-slightly-after-feds-policy-update-2017-06-14) with the yield on the 10-year bond, which moves inversely to prices, down 8 basis points to 2.128%, the lowest level since last November, while the yield on the two-year Treasury was down 5 basis points at 1.319%.
Stocks are showing a muted reaction to the Fed announcement but they're still focused on growth, unlike bonds, which are moving more cautiously, said Joe Saluzzi, co-head of equity trading at Themis Trading.
The Fed also mapped out a very gradual approach to shrink its $4.2-trillion holdings of Treasury- and mortgage-backed assets that would allow it to begin as early as September.
The Fed sees the cap for Treasury securities to be $6bn per month initially, increasing in $6bn increments at three-month intervals over 12 months until it reaches $30bn per month. "But shrinking balance sheet would boost the dollar in the long run", the trader said, noting the Fed's plan to reduce its portfolio would "inevitably" pile pressure on the Chinese yuan. Balance sheet reductions also can have a tightening effect. "Until we see a reversal of the recent weakness in economic growth, retail sales and inflation, the Fed will be on the sidelines". It forecast that prices will rise just 1.6 per cent this year, down from a March forecast of 1.9 per cent. Yellen's term as chair ends in February 2018, and Trump has not said if he would ask her to stay on.
Near-term risks to the economy "appear roughly balanced", but the Fed is "monitoring inflation developments closely", the bank said. "The expectation will still be that for this year and the next year, you won't get policy rates exceeding 2%".
As attorney general, Sessions is unlikely to answer in detail questions about conversations he's had with Trump. Sessions is the most senior member of Trump's administration caught up in the Russian Federation controversy.
R-series fields will be developed as a subsea tieback to the existing control and riser platform off Block KGD6. The new government policies facilitated fresh investments in the aging KG-D6 block, Mukesh Ambani said.
Giants India take on a spirited Bangladesh side in the second semifinal of ICC Champions Trophy 2017 in Cardiff today (June 15). Pakistan would bowl brilliantly restricting the flow of runs and knocking England over for 211, a target they chased easily .
Je vais considérer qu'un entraîneur entraîne, qu'un joueur joue, qu'un dirigeant dirige et qu'un président préside. Donc je ne sais pas si ce n'est pas un peu tôt, s'il ne faut pas attendre un peu la suite" a-t-il ainsi déclaré.
Some of Mr Trump's allies have begun questioning Mr Mueller's credibility as the investigation intensifies. Reports that Trump was considering firing Mueller surfaced last week, again citing unnamed sources.
COLLINS: If President Trump ordered you to fire the special counsel, what would you do? "I regret that I do not", Rosenstein said. Rosenstein said "I think the answer is no" but said it would depend on the circumstances.
On Friday, when the government releases the jobs report for May, that pattern is likely to extend itself. The unemployment rate ticked down a tenth of a percentage point to 4.3 percent, the lowest since 2001 .
A Malaysian air force fighter jet was reported missing on 15 June and a search and rescue operation has been launched. The bodies of the two pilots are being brought to the Tengku Ampuan Afzan hospital in Kuantan for a post mortem.
Now India return to Edgbaston where they launched their title-defence with a 124-run thrashing of arch-rivals Pakistan . With R Ashwin bowling well in the previous game, there is no apparent thinking over changes in the team combination.
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