Arguing that recent shortfalls in inflation were "transitory", the Fed kept to its forecast of one more 25-basis- point rate hike this year and three in 2018. "That happened in the '80s, but we've had 30 years during which that made no sense", as interest rates have fallen and more investors have plowed into the stock market and elsewhere to chase returns. The central bank had pushed rates to near zero in response to the financial crisis.
Citing official sources the paper said that President Donald Trump was now personally under investigation for obstruction of justice. The Nifty slipped below its crucial support level of 9600 in opening trade. But, any dips, should be used as buying opportunity.
The FOMC also said that it will begin reducing its $ 4.5 trillion balance sheet this year. If inflation doesn't pick up, he said, the Fed will find that raising rates and reducing its balance sheet is "going to be a hard maneuver".
The US Fed statement is apparently hawkish, the SGX's reaction may be too bearish that what is warranted.
Neil Williams, chief economist at Hermes Investment Management: "It reminds us the Fed remains the test case for whether central banks can ever "normalise" rates". So, it can be said that this is in line with expectations.
Markets also had expected the data in the Summary of Economic Projections.
TOKYO (AP) - Shares fell in Asia on Thursday after the U.S. Federal Reserve raised interest rates, as expected.
While a narrower interest rate differential with the USA should pressure the yuan, it was little changed in spot trade on Thursday at 6.7939 per dollar by midday. There are many instances wherein no such meaningful correlation is found.
Now, within the space of six months, we've had two more rate hikes.
The rate-hike assumes significance as it is expected to lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India, and is also expected to dent business margins as access to capital from the USA will become expensive. The tone of the policy, which everyone was keenly looking forward to, didn't convey anything that was unexpected. In brief, the Fed is sticking to its broad guidance of normalization over the next two years.
Still, the PBoC is keeping a wary eye on seasonal liquidity tightness, and has moved to inject large amounts of funds to ease worries of another cash crunch like that in June 2013, which sent money market rates skyrocketing. Wall Street ignored the rate hike with the Dow closing 0.2 percent higher and Nasdaq closing 0.4 percent lower.
There was a clear warning that if wages start to rise as workers seek to claw back what they have lost, the Fed will take action.
"Thus, we may be facing another two years of negative real policy rates in the U.S. and United Kingdom". Presently, it continues to be negative.
"Now that interest rates are rising and debt burdens have increased, it's no surprise we've seen delinquencies on the rise, as well", said Bankrate.com's McBride. Now the economy is far better off.
Post the initial nervousness, equity markets globally usually tend quickly adjust to changes and rebound back.
So, let me crawl out on a limb again and predict this: Before the end of 2017, there will be more talk about the Fed cutting rates to help the economy than about raising them.
RETAIL SALES: The Commerce Department said people spent less money at gas stations, department stores and electronics retailers last month.