New Fed Chief Sees Interest Rates Continuing To Rise As Economy Strengthens

Reuters

Earlier in the session, the dollar hit a six-week high after a set of solid US economic data stoked expectations of four rate hikes by the Fed.

Initial U.S. jobless claims (http://www.marketwatch.com/story/us-jobless-claims-fall-to-lowest-level-since-1969-2018-03-01) fell by 10,000 to 210,000 in the seven days ended February 24, the lowest level in almost 50 years.

In addition, reports covering US auto sales for February are scheduled to roll in throughout the day. The S&P 500 lost 21.52 points, or 0.79 percent, to 2,692.31 and the Nasdaq Composite dropped 59.12 points, or 0.81 percent, to 7,213.89. "The best approach is to deal directly with the people who are affected rather than falling back on tariffs".

The Fed chair stopped short of giving too much detail, adding that a decision would be made with other Fed governors at the upcoming Federal Open Market Committee meeting in March. Some traders took that as a signal that the Fed may get more aggressive about raising interest rates, which has been a top concern for investors.

Powell added that he expects to see wage inflation soon. "Similar numbers of participants see upside risk to the outlook and downside risks on inflation", analysts from Barclays wrote in a recent note.

On the data front, the Commerce Department said consumer spending rose 0.2% in January, while personal income rose 0.4%. Bank of Japan's policy board member Goushi Kataoka called for more easing efforts, aiming to hit the central bank's 2 percent inflation target.

Powell said that when it came to projecting future rate increases at the Fed's upcoming March meeting, at which a quarter percentage point rise is nearly certain to be announced, he and other members of the Open Market Committee would be "taking into account everything that's happened since December". "Nothing in that suggests to me that wage inflation is at a point of acceleration", Powell testified. The U.S. unemployment rate is at a 17-year low of 4.1 percent.

How to lose your 'Top Secret' security clearance in the US
Kushner may assert that he can do his job with a downgraded security clearance but, having worked in the White House and in diplomacy, I think that is false.

Iraq court sentences 16 Turkish women to death for joining IS
Counterterrorism laws in Iraq allow the courts to sentence people even if they have not taken part in any terrorist acts. Sixteen Turkish women were found guilty of terrorism and sentenced to death by an Iraqi court on Sunday, CNN reports.

'Ill' Neymar misses PSG training ahead of Marseille clash
Paris Saint-Germain may have won on Le Classique against Marseille on Sunday, but in the end, it may have lost its top player. PSG have plenty of depth, and the decision not to part with Julian Draxler in January could prove crucial.

Powell will speak in the late morning before the Senate Finance Committee.

"By continuing to gradually raise interest rates over time, we're trying to balance those two things ...achieve inflation moving up to target, but also make sure that the economy doesn't overheat", said Powell. "The Fed is actually going to be wondering whether or not four rate hikes are going to be enough this year".

"Even though the dollar is stronger and Treasury yields are higher, the gold market oversold itself yesterday, and now we're recovering a bit", said Walter Pehowich, executive vice-president of investment services at Dillon Gage Metals.

"Powell erred to the hawkish side and had speculation running rampant that the Feds will trigger quicker pace of interest rate increases as the economy accelerates", said Stephen Innes, head of trading at Oanda.

His comments on Tuesday sparked a jump in USA bond yields and a drop in US stocks as investors took his bullish statements about the economy as a signal the Fed would raise rates four times this year, as opposed to the three increases policymakers projected in December.

Information for this article was contributed by Sophie Caronello of Bloomberg News.

Related news:

Hot News

isis-killer-beheading-video-story-top Real Madrid's Marcelo back in training ahead of PSG Champions League clash
Mar 03, 2018 - 00:40
He arrived on an Air France flight from Paris and left in a wheelchair, a photo taken by one of his fellow-passengers showed. According to Marca , the couple will not be alone at the Hospital Mater Dei in Belo Horizonte for the procedure.

isis-killer-beheading-video-story-top Jacob Moore Becomes 1st Male Gymnast to File Suit Against Larry Nassar
Mar 03, 2018 - 00:39
Raisman's lawsuit, seeking unspecified damages, was filed on Wednesday in California state court in Santa Clara County. Once she realized his medical techniques were really sexual abuse , she felt "humiliation, guilt, shame and disgust".

isis-killer-beheading-video-story-top LL Bean latest company to ban people under 21 from buying rifles
Mar 03, 2018 - 00:36
The US firm says it will stop selling firearms to people under 21 and remove items resembling assault rifles from its website. The 19-year-old former Stoneman Douglas student is accused of using an AR-15 assault-style weapon to carry out the killing.

isis-killer-beheading-video-story-top Syria Cease-Fire Yet to Be Implemented — UN Aid Chief
Mar 03, 2018 - 00:36
Russian President Vladimir Putin said shells had hit the territory of the Russian Embassy and trade mission in Damascus. But no humanitarian aid has gone in and no civilians have left. "When will your resolution be implemented?" he asked.

isis-killer-beheading-video-story-top They Are Just So Mobile - West Ham Star Dazzled By Liverpool's Attackers
Mar 02, 2018 - 02:10
Just because we got out of a 4-1 victory against West Ham on Saturday doesn't mean we can rest on our laurels against other teams. Dom Solanke last week was not in the squad. "There's not much more you want from a no.9 but that's not just all he offers".

isis-killer-beheading-video-story-top White House: Talks with North Korea must lead to ending nuclear program
Mar 02, 2018 - 02:09
Pyongyang mounted a charm offensive during the Games, sending athletes, cheerleaders and performers. She met Moon on Friday as part of a weekend trip leading the US delegation to the closing ceremony.

isis-killer-beheading-video-story-top Patriots Rumors: Rob Gronkowski Expected To Return For 2018 Season
Mar 02, 2018 - 01:57
According to Rapoport, Gronkowski "took several weeks off to kind of let loose and put football in the back of his mind". First they somehow reeled Josh McDaniels in the fold while burning the rival Colts, and now Gronk is back.

isis-killer-beheading-video-story-top Saudi views Pakistan as one of top destinations for investment: deputy minister
Mar 02, 2018 - 01:49
The cost for Yemen itself has been a humanitarian disaster, while it has also drained Saudi coffers in a time of austerity. From June, women will be allowed to drive and have been recruited to work in ground services in airports.

isis-killer-beheading-video-story-top Pakistan's ruling party picks ousted PM's brother Shahbaz Sharif as president
Mar 02, 2018 - 01:47
Sharif criticized his disqualification by terming it a conspiracy against him. However, he will not have any specific position in the party.

isis-killer-beheading-video-story-top Latest Robert Lewandowski Premier League Rumours
Mar 01, 2018 - 04:05
There is sure to be a colossal battle for his signature if he does indeed opt to force a move away from the Allianz Arena. Moreover, Chelsea went out and signed Frenchman Olivier Giroud in the January transfer window from Arsenal.

isis-killer-beheading-video-story-top Watch Russell Wilson Crush Batting Practice Homer At Yankees Spring Training
Mar 01, 2018 - 02:01
As an example, maybe there'd be some nugget that might resonate with Kyle Seager and turn him into a more consistent hitter. Again, I might be reaching with that thought, especially the part about the Mariners even making the playoffs.

isis-killer-beheading-video-story-top Failing Pit Guns Steal The NASCAR Weekend Spotlight
Mar 01, 2018 - 00:33
Harvick overcame an early pit road issue to dominate the race and make amends for last season's penalty that cost him the race. After Harvick won, he held three fingers out his vehicle window, honoring the late legend who made the No. 3 auto famous.

isis-killer-beheading-video-story-top Degas painting missing for 9 years found outside Paris
Feb 26, 2018 - 04:46
The Musee d'orsay lent a painting by Degas in the musée Cantini in Marseille in October 2009, two months later it was stolen. The painting will be featured in the "Degas at the Opera" exhibit that's planned for September 2019 at Musée D'Orsay.

isis-killer-beheading-video-story-top Supplier to NHL's Calgary Flames breathes again as BC wine ban suspended
Feb 26, 2018 - 04:42
Prodan said he has yet to hear about layoffs, but some wineries are putting expansion plans on hold. McWatters said B.C.'s wine industry needs to reconnect with its Alberta customer base.

isis-killer-beheading-video-story-top Plane crashed shortly after takeoff, killing 4
Feb 26, 2018 - 04:42
Jon Kaupp reportedly told The Daily Sentinel on Friday that the plane was grounded Thursday in Grand Junction by snowy weather. None of the four people aboard the aircraft survived, authorities said. "We have lost four unbelievable men".