Wall St. opens slightly lower after Fed's hawkish stance

One is this week.

Who will Donald Trump nominate to lead the world's most important central bank? The Fed's unwind "could be a little more disruptive than people think", the CEO said at a conference in Paris.

"I really haven't had to give further thought at this point to this question", she told House lawmakers in July.

The week finally saw some action as the Federal Reserve met and kept rates on hold. Ms. Yellen's term expires in February, and Vice Chairman Stanley Fischer is giving up his seat.

An additional criticism of Yellen's tenure is that the Fed's steady campaign of greater transparency has slowed to a crawl. Trump has more recently suggested he'd consider rehiring Yellen for another term, saying she's "done a good job".

CURRENCIES: The dollar rallied against its peers after the Fed statement, rising to a almost two-month high of 112.53 yen from 112.23 yen on Wednesday.

Wall Street expectations for a further rate-increase jumped to about 73% probability in December, compared with 52% chance last week, CME Group data show.

In Australia, central bank governor Philip Lowe said interest rates were more likely to go up than down but would stay at record lows for some time as inflation remained weak. At the start of 2016, the FOMC clarified that its 2 percent inflation target was "symmetric", meaning it would resist inflation that was too low, as well as too high. But the GAO's review of studies that have examined the effect of bag fees on ticket prices shows that charging separately for bags reduced fares by less than the new bag fee itself.

This is going to be something going on in the background of the markets for the next four or five years.

On the other hand, the Fed remained unshaken in its confidence that the economy's underlying strong trend remains intact, and that the sluggish inflation is temporary. If prices don't rise, wages don't either.

The Fed also left rates unchanged but penciled in one more rate hike before the end of the year. The economy was in transition to a new pattern of growth, and monetary policy had to be rethought to fit it. Of course, it's worth noting that the Fed has telegraphed its plans before and deviated from the projected path. The average interest rate on credit cards has gone from just under 15% to 16.7% according to CreditCards.com data.

Economic growth in the U.S. has remained relatively robust into the third quarter, according to certain survey measures and hard data such as industrial and manufacturing production. The focus thus shifts to the beginning of the Fed's reduction of its $4.5 trillion balance sheet, set to start in October.

The central bank effectively lent trillions of dollars to the government to spur the economy and make it cheaper for everyone to borrow.

YDSTIE: The Fed is very gradually paring back its balance sheet to avoid spooking the financial markets.

In November 2008, in the midst of the financial crisis, former Fed Vice Chair Alan Blinder says, the central bank had already exhausted its main tool to fight recessions. Now the Fed is preparing the final move to unwind its support - and it wants to be as boring as possible. "Our balance sheet is not meant to be an active tool for monetary policy in normal times", Ms. Yellen emphasized Wednesday, adding that "we therefore do not plan on making adjustments to our balance-sheet normalization program".

  • Zachary Reyes