US Fed hike rates for second time this year

Author

20 June, 2017

The Federal Reserve was able to modestly raise rates because of the USA economy's relatively strong performance, in comparison with the United States or Europe.

The rise in the yuan midpoint appeared to track the global dollar index, which fell after the Fed's decision.

The yield curve, however, flattened with the difference between short-dated two-year Treasury yields and benchmark 10-year yields narrowing to a difference of 78.58 basis points, the smallest since 9 September.

"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".

Experts said that the State Bank of Viet Nam's policies on exchange rates helped the market avoid external shocks, adding that the Fed rate hikes would not have significant impacts on VND/USD exchange rates.

Fed chair Janet Yellen (pictured above) said that the prospects for world's largest economy remained bright, with GDP growth of 2.2% now penned in for 2017.

The euro was down 0.3 percent at $1.1183, a six-day low, while the yen was flat at 109.58 per dollar. "They are expecting 2 percent, which may not be realistic". A neutral rate implies no negative effect on growth. The Hang Seng in Hong Kong dropped 1.2 percent to 25,565.34, but Shanghai's Composite index rose 0.1 percent lower to 3,132.49.

The US Federal Reserve has increased interest rates for the second time in three months. The Fed has long had a 2 percent annual target, but inflation has been much lower.

It means the USA central bank is scaling back its support for the economy as it continues to recover and grow.

Minneapolis Fed President Neel Kashkari dissented in Wednesday's decision. More interestingly, policy makers set out a detailed plan to shrink the $4.5 trillion balance sheet by gradually reducing security holdings. Fed officials project growth of roughly 2 percent in 2017.

Fed officials are wrapping up their two-day June meeting. It has been done for the second time in 3 months. Fed officials previously increased the rate in March to a range of 0.75 to 1 percent. It is bloated with the huge number of U.S. government bonds, or treasuries, and mortgage-backed bonds it bought in the years after the 2008 financial crisis in order to lower long-term interest rates and pump prime the economy with cash.

However, Yellen said business and household confidence remain quite strong, and echoed the statement from the Fed's policy-setting Federal Open Market Committee, which repeated its confidence that the economy will continue to expand "at a moderate pace" even with further gradual rate increases. The kiwi fell 0.29% to 0.7248 against the dollar after the data.

A man looks at an electronic stock board showing Japan's Nikkei 225 index at a securities firm Thursday, June 15, 2017, in Tokyo.


More news


  • Perez mum on rumors Ronaldo wants to leave Real

    With Ronaldo reportedly intending to quit Real Madrid , ESPN FC's Mark Ogden assesses the chances of a Man United return. Florentino Perez believes Cristiano Ronaldo is innocent of the tax accusations levelled against him.
    UK, EU Officials Begin Brexit Talks

    UK, EU Officials Begin Brexit Talks

    The two men and their senior aides dined on Belgian asparagus, red mullet and meringue cake before officials broke off for separate talks.
    Nine-Year-Old Stuns 'America's Got Talent' Audience With Céline Dion Cover

    Nine-Year-Old Stuns 'America's Got Talent' Audience With Céline Dion Cover

    You can catch the latest series of America's Got Talent in the United Kingdom on free-to-air channel Tru TV, every Tuesday night at 8pm.
  • Talks begin over British divorce from European Union

    Such firms sold 7.3 billion euros ($8.2 billion) worth of goods to customers in Britain a year ago , their fourth-biggest market. The election left an image of a dysfunctional Britain coming up against a well-oiled European Union negotiating machine.

    Analysts Opinions on: Sabra Health Care REIT, Inc. (SBRA)

    The firm has price to earnings ratio stands at 16.23, it indicates the expected price of a share based on its earnings. The target indicates a potential upside of 28.10 % from the last stock price of Sabra Healthcare REIT (NASDAQ:SBRA).

    Ryan Reynolds Shares First Peek at Deadpool 2 Filming

    As of now, we already know that Colossus and Negasonic Teenage Warhead will be back. I'm already sure there's going to be jokes about movie sequels.
  • Jury deliberates third day in Cosby sex assault trial

    Cosby's lawyers have argued Constand was Cosby's willing lover before she invented the assault as a way of getting to his money. More than 60 other women have since come forward sharing similarly lurid encounters with the man once known as "America's Dad".

    Brexit talks oficially kick off as United Kingdom hopes for 'happy resolution'

    Mr Barnier said that the objective of the talks was to deliver an "orderly withdrawal of the United Kingdom from the EU".
    Golden State Warriors vs. Cleveland Cavaliers NBA Finals 2017 Game 4

    Golden State Warriors vs. Cleveland Cavaliers NBA Finals 2017 Game 4

    The Warriors grabbed an offensive rebound after a missed shot, and James and Thompson both went out to defend Klay Thompson. The Warriors thought they were carving out their place in history when they set a record with 73 wins last season.
  • Russian Federation  scores wild first goal vs. New Zealand at 2017 Confederations Cup

    Russian Federation scores wild first goal vs. New Zealand at 2017 Confederations Cup

    A Confederations Cup trophy, never mind a World Cup title, might be too much to ask even for Putin, But Saturday was a start. New Zealand, meanwhile, were finding it tough to hold maintain possession of the ball, which led to a lack of chances.

    Sky Solar Holdings, Ltd. (SKYS) Downgraded to "Neutral" at Roth Capital

    Zacks Investment Research lowered JA Solar Holdings, Co. from a "hold" rating to a "sell" rating in a report on Monday, May 29th. Over the last five days, shares have faced -5.26% losses and now is up 5.14% since hitting its 200-day moving average of $72.06.
    Macron reappoints Edouard Philippe as PM after Sunday's vote

    Macron reappoints Edouard Philippe as PM after Sunday's vote

    France's Socialist Party and its allies won just 33 seats, a dramatic collapse from its previous haul of 277 seats. France's new centrist president and his Republic on the Move party are seeing a resounding victory.