US RATE HIKE IMPACT-JUNE 2016

worthiness · 1 US RATE HIKE IMPACT-JUNE 2016 Sun May 15, 2016 11:15 pm

worthiness

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Next FED meeting on interest rates is scheduled on 16-17 June 2016. Possible rate hike tends to boost the local currency as it is a sign of healthy inflation. FED chairwoman declared before that gradual rate increase is likely. If another rate hike happens in June what would be the impact on our stock market.

kumarweerarathne · 2 Re: US RATE HIKE IMPACT-JUNE 2016 Sun May 15, 2016 11:28 pm

kumarweerarathne

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Federal Reserve policy makers left open the door to raising interest rates in June by nodding to improvement in global financial markets and downplaying recent weakness in the U.S. economy.
The Federal Open Market Committee omitted previous language that “global economic and financial developments continue to pose risks,” instead saying officials will “closely monitor” the world situation, according to a statement released Wednesday following a two-day meeting in Washington. The Fed left its benchmark interest rate unchanged.
“Their removal of the line on risks is pretty significant,” said Carl Tannenbaum, chief economist at Northern Trust Corp. in Chicago and a former Fed official. “That might reflect increased comfort on the committee that global influences appear more manageable.”
The yield on 10-year U.S. Treasury bonds dropped by about 0.06 percentage point while U.S. stocks fluctuated with the dollar. Fed Chair Janet Yellen wasn’t scheduled to hold a post-meeting press conference.
The Fed’s assessment of how economic conditions have evolved since the committee last met in March was mixed. Officials acknowledged recent weaknesses while adding dashes of optimism over what’s ahead for the labor market and consumer spending.
“Labor market conditions have improved further even as growth in economic activity appears to have slowed,” the FOMC said. “Growth in household spending has moderated, although households’ real income has risen at a solid rate and consumer sentiment remains high.”

The committee reiterated that it will probably raise rates at a “gradual” pace. The central bank’s next meeting is June 14-15.
Extending a hold since raising interest rates in December from close to zero, the committee said that inflation has continued to run below the Fed’s 2 percent target, and market-based measures of inflation compensation remain low.