Will the Fed Raise Interest Rates in March 2017?
- Author: Zachary Reyes Mar 08, 2017,
Mar 08, 2017, 5:57
Federal Reserve officials have lined up to sing about the need for higher rates soon, sending the implied probability of a move this month surging to 74 percent, from just 30 percent at the start of the week.
"At our meeting later this month, the (Federal Open Market) Committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate", said Yellen in a speech at the Executives' Club of Chicago.
Still, speculators reduced bullish bets on the U.S. dollar in the week ending February 28, pushing net longs to their lowest since early October, according to Commodity Futures Trading Commission data released on Friday and calculations by Reuters. Europe's benchmark STOXX 600 eased although it was on track to end the week up more than one percent. Latest polls show Alain Juppe, who is more centrist than Fillon, would reach the second round should he replace him as the Republicans candidate. "As we expect the jobs report to be good, we expect the Fed to deliver", said Danske Bank in a report. The Nasdaq Composite Index was down 21.58 points, or 0.37 percent, to 5,849.17. The Fed Funds Futures now pricing in a probability of more than 96 percent of a rate hike this month.
A Fed policy decision is due at the end of its March 14-15 meeting.
Aside from anticipating a United States rate hike, BI is also following statements regarding the USA plan to renegotiate a trade deal with Mexico, which was read by the market as a signal that the Trump's administration would prefer a weaker dollar to maintain the country's competitiveness.
The total market value of global stock markets hit an all-time high of $56,7 trillion earlier this week, having added more than $4 trillion since Donald Trump's election as U.S. president last November.
Investors flocked to buy shares of the hottest technology stock offering in three years, spurring a 44 percent pop on the first day of trading for Snap Inc, the owner of messaging app Snapchat. Meanwhile, USD/JPY has edged higher to retake the 114 handle.
At 1545 GMT, the Dow Jones Industrial Average was down 0.4% at 20,922.49, the S&P 500 fell 0.59% to 2,369.12 and the Nasdaq was 0.69% weaker to 5,830.21.
The Aussie was last up 0.6 percent at $0.7621, after fetching $0.7633 on the policy decision.