US Fed raises interest rates, fourth increase since Dec

GBPUSDJune14

"I don't think it will affect the long-term mortgage rates that most people take, but things like credit cards, home equity lines, short term auto loans, things like that would typically go up by an equal amount, a quarter of a percentage point".

The Standard & Poor's 500 index, the benchmark that professional investors follow, likewise wasn't changed much either.

S&P 500 futures fell by 15.80 points, or 0.7%, to 2,419.50, while Dow Jones Industrial Average futures gave up 89 points, or 0.4%, to 21,238.00. The jobless rate stands at 4.3 percent and is expected to fall further.

Now the Fed said the inflation will be below its 2 percent target. Annual inflation is running at 1.7 percent.

They forecast US economic growth of 2.2 percent in 2017, an increase from the previous projection in March.

The 10-year U.S. Treasuries yield had slipped to as low as 2.103 percent and last stood at 2.129 percent.

The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate and the rate to remain below longer run levels. The core rate of inflation increased at just 1.7 per cent on year, the fourth straight monthly deceleration and the slowest overall pace in two years. The policymakers signaled that they still expect to raise rates once more in 2017.

Google fined record $2.7 billion in European antitrust case
The product allows consumers to compare products and prices online, as well as find deals from online retailers and resellers. Meanwhile, other American tech companies that are rivals of Google have cheered on the European regulators against Google.

Analysts in recent weeks have become increasingly doubtful there would be a third rate increase later this year, as inflation, consumption and other economic data have indicated the weakness seen in the first quarter has continued.

NOGUCHI: Fed officials raised interest rates today despite the fact that the latest readings on inflation show that it is not picking up steam.

That said, much of the market's concern was born in the hours prior to the Fed statement, when data showed that core US inflation eased to a two-year low 1.7% and retail sales only grew at a 0.3% pace. Futures on bourses in Japan, Australia and South Korea all retreated after technology stocks led declines on USA equity benchmarks. All participants agreed to augment the Committee's Policy Normalisation Principles and Plans by providing the following additional details regarding the approach the FOMC intends to use to reduce the Federal Reserve's holdings of Treasury and agency securities once normalisation of the level of the federal funds rate is well under way.

Economists polled by MarketWatch anticipate a headline number of 244,000 for the jobless claims report.

Experts said that the State Bank of Việt Nam's policies on exchange rates helped the market avoid external shocks, adding that the Fed rate hikes would not have significant impacts on VNĐ/USD exchange rates. That was down from 1.9 percent in March. "It's going to be the equivalent of about one rate hike a year".

That view is in contrast to what financial markets are thinking right now. USA stock markets were relatively flat through afternoon trading, while the yields on 10-year Treasury notes had fallen to 2.11 percent. In a separate report from the Labor Department's, Consumer Price Index declined 0.1 percent in May. In Asia, Japan's Nikkei 225 ended the day marginally lower.

Against its Japanese counterpart, the dollar shrugged off earlier losses and was flat at 109.55 yen, above Wednesday's eight-week low of 108.81 yen.

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