The minutes from the Federal Reserve on Wednesday, which we were hoping would provide additional clarity on its interest rate expectations, instead displayed the uncertainty the central bank has about how to proceed, largely due to the unknown effects of what Donald Trump’s stimulus plans will have on the economy and inflation.
Many Federal Reserve policymakers said it may be appropriate to raise interest rates again "fairly soon" should jobs and inflation data come in line with expectations, according to the minutes of the Fed's last policy meeting released on Wednesday.
Global stocks hit record highs on Wednesday, topping 2016's gains just two months into 2017, while the dollar rose before Federal Reserve minutes that will be scoured for clues about the next U.S. interest rate rise.
The dollar rose broadly on Tuesday after two Federal Reserve policymakers pointed to a potential U.S. interest rates rise next month, turning attention to the bullish fundamentals of the world's biggest economy.
There wasn’t much in the way of economic data today and U.S. stock markets are closed because of Presidents’ Day holiday. Stating the obvious here, but it has been a rather quiet and dull day in the markets. Things will hopefully pick up from Tuesday, although Wednesday is likely to be most important day of the week – certainly for the dollar – due to the release of the FOMC’s last meeting minutes.
European stocks rose on Monday, with gains in telecoms and banks offsetting a big fall in Unilever, while the dollar dipped as uncertainty over politics and the timing of a U.S. interest rate rise kept investors nervous.
Imagine if, at the start of the week, I had told you the following: Top-tier US data would be unanimously strong, with solid readings on inflation (CPI and PPI), retail sales, and a 30-year high in the Philly Fed Manufacturing index.
Stock markets were explosively volatile this week, with most areas sprinting into record levels as the mixture of stabilizing oil prices and improving economic data across the globe boosted risk appetite.
World stocks rose to a whisker off all-time highs on Wednesday and the dollar rose for the 11th straight day following Federal Reserve Chair Janet Yellen's flagging of a possible interest rate rise next month.