Wednesday 15th February 2017
|Text too small?|
Wall Street continued its record-setting streak while the US dollar also gained after Federal Reserve Chair Janet Yellen signalled further interest rate increases ahead.
“At our upcoming meetings, the committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate,” Yellen told the Senate Banking Committee.
The Federal Open Market Committee begins its next two-day policy meeting on March 14.
"I can't tell you which meeting it would be," Yellen said, including specifying "whether it's March or May or June,” according to Reuters.
“Waiting too long to remove accommodation would be unwise, potentially requiring the FOMC to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession,” Yellen noted.
Yellen warned that changes in fiscal policy or other economic policies could potentially affect the economic outlook.
“Of course, it is too early to know what policy changes will be put in place or how their economic effects will unfold,” she noted. “While it is not my intention to opine on specific tax or spending proposals, I would point to the importance of improving the pace of longer-run economic growth and raising American living standards with policies aimed at improving productivity.”
Wall Street moved higher. In 1.30pm trading in New York, the Dow Jones Industrial Average added 0.3 percent, while the Nasdaq Composite Index gained 0.2 percent. In 1.14pm trading, the Standard & Poor’s 500 Index increased 0.3 percent.
The three benchmarks touched fresh record highs. The Dow rose to 20,475.89, while the S&P 500 climbed to 2,334.56, and the Nasdaq reached 5,778.45.
"This doesn't mean they will move in March, but the Fed wants to have the option to move," Omer Esiner, chief market strategist at Commonwealth Foreign Exchange in Washington, told Reuters. “The market seems to be under-pricing a upcoming rate hike."
The Dow climbed, led by gains in shares of Goldman Sachs and those of JPMorgan Chase, recently up 1.5 percent and 1.3 percent respectively. Apple shares touched a record high US$134.93 amid bets its next iPhone model will bolster sales.
US Treasuries declined, pushing the yield on the 10-year note five basis points higher.
In Europe, the Stoxx 600 Index ended the session with a 0.1 percent increase from the previous close, underpinned by gains in car makers. The UK’s FTSE 100 Index slipped 0.1 percent, and Germany’s DAX Index edged 0.02 percent lower.
France’s CAC 40 Index added 0.2 percent, bolstered by shares in Peugeot.
PSA Group, the maker of Peugeot and Citroen cars, is exploring an acquisition of General Motors’ European business, Bloomberg reported.
No comments yet
MARKET CLOSE: NZ shares fall as raft of earnings loom; Heartland, Fletcher drop, Sky TV, Air NZ gain
NZ dollar falls vs greenback, Aussie as investors seek clues over diverging rate tracks
NZ's housing-related imbalances set to peak in 2018, S&P Global says
Bapcor's ex-Hellaby auto unit still exceeding expectations
KiwiRail operating earnings rise despite Kaikoura line outage
Used car import body says 'short-term' hit from MPI's stink bug strategy worth it
CBL's European subsidiary fights Irish central bank ban on new business
ASX-listed Super Retail Group pays $144M for Macpac, more than twice the 2015 price
Mark Tume appointed chair of Ngāi Tahu Holdings board
ANZ extends Veritas' debt for a third time, seeking shareholder approval to sell Mad Butcher