Published: Wed, March 15, 2017
Markets | By Erika Turner

Waiting is the hardest part: Stocks step back ahead of Fed

Waiting is the hardest part: Stocks step back ahead of Fed

Fed members will also issue their updated forecasts for future rate hikes.

Considering a less than Fed-friendly President Trump and Republican-controlled Congress, pressure will build to change course and begin reducing the size of the excess reserves, thereby reducing interest expense while also allowing the overnight lending rate to once again naturally approach the federal funds target rate. The downside, though, is that if higher interest rates are accompanied by inflation, cash alternatives may not be able to keep pace with rising prices.

Fathom Consulting, an economic forecaster, said spare capacity in the labour market is disappearing fast and it won't be long before wages start to rise rapidly.

The unemployment rate dropped to 4.7% from 4.8% in January, just a notch above its decade low, while hourly wages for all private-sector workers rose six cents last month on average, but still up from the 5-cent gain the prior month and up 2.8% from February of previous year.

How will consumers and corporate America react?

When the USA dollar rises, it has numerous same impacts on the US economy as monetary-policy tightening by the Fed. A rise in interest rates would encourage an influx of funds into the U.S., pushing up the dollar relative to other countries. It's risen significantly since the election because President Trump's promises to cut taxes and increase government spending triggered volatility in US bonds.

In addition to the Fed, the Bank of England, the Bank of Japan and Turkey's central bank will all hold meetings this week.

Federal judges find Texas gerrymandered maps on racial lines
Bush, respectively, explicitly stated that districts were drawn to "minimize Hispanic electoral opportunity". The panel found that Republicans had used race as a motivating factor in gerrymandering the districts.

Nine stocks fell on the New York Stock Exchange for every two that rose.

"When rates rise, entrepreneurs relying on credit or relying on customers [who rely] on credit may face additional headwinds", he said. Will the new nominees favor letting bonds simply mature or will they pursue an active selling program? "We're creating more jobs, we're expanding, and it isn't being coupled with inflation". The recent frenzy in housing construction activity is set to decline in the coming months and years, but "the market appears to be already pricing close to bottom of the cycle earnings in Brickwork's building products division", Mr Piper says. Turkey and Russian Federation were highlighted as countries with corporate sectors that expanded quickly based on heavy borrowing using dollar-denominated bonds.

Such was the strength of the reaction, the then-Fed chairman, Ben Bernanke, abandoned his plan.

Many think the U.S. stock market is due for a retreat, but opinions differ on whether the rate rise will be enough to burst the market's exuberance.

Is a currency war possible?

He expects the greenback to hit 1.45 to the Singapore dollar only in the second half this year - it was around 1.412 yesterday evening.

"Because the correlation between the stock market and bond yields is unusually positive today, even though the Fed is finally starting to increase interest rates, rather than stumble soon, the stock market may just continue to rumble", Jim Paulsen, chief investment officer at Wells Fargo Capital Management, wrote in a note Monday. For example, the U-6 unemployment rate is less encouraging. Trump is promising 4% annual growth. Low interest rates incentivize borrowing and spending, and debt is far cheaper to acquire.

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