The federal reserve to raise interest rates and to the dollar by force to oil difficult

By Dennis Green,2015-09-03 14:22
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The federal reserve to raise interest rates and to the dollar by force to oil difficult

    The federal reserve to raise interest rates and to the

    dollar by force to oil difficult

    On Wednesday (Dec. 16) under the much-anticipated, markets expect,The federal reserveFinally uncoveredIncreases in interest rates, in its latest statement released resolution rate 25 basis points.Although in the subsequent press conference,yellenAccording toThe United StatesModerate economic growth, and outlook for the future interest rates take cautious view, but in the federal reserve is in the interest rate of lattice figure implied in the future may raise interest rates four times a year, faster than the market expected, supportThe dollarSmall rise in the end.Crude oil, oil prices remain low, in addition to the federal reserve to raise interest rates to oil prices, announced on the EIA of crude oil inventorydataRecorded again, this makes oil prices fell 3%.

    Specific markets, the dollar index volatility climbed to a high of a week, the fed keep the rate that makes the market intensified shocks and markets that the fed rate increases in the future could be faster than expected boost the dollar edged higher;The euro against the dollar dropped to 1.09, mainly by the federal reserve's decision, the euro zone economic data released by the performance is good, reflects the good recovery;Gold shock after the federal reserve to raise interest rates rise, some short-covering positions appear on the market;Oil prices fell 3%, dragged down by a huge increase in inventory and the federal reserve announced raising interest rates.

    The dollar index volatility climbed to a high of a week, the federal reserve keep the rate that makes the market intensified shocks and markets that the fed rate increases in the future could be faster than expected to boost the dollar was slightly higher.

    The fed decision statement and yellen testimony in line with market expectations, the market volatility.The federal reserve to raise interest rates 25 basis points, in line with expectations.Cut interest rates expected in 2017, cut in 2016 inflation expectations at the same time, also raised its 2016 growth forecast to downgrade and the unemployment rate is expected in 2016.The fed's yellen in conference, also published a more neutral.The fed, however, the latest interest rates lattice figure shows the future may raise interest rates four times a year, each rate 25 basis points.This faster than the market had expected, boost the dollar edged up eventually.

    The dollar index shows an hour

    The fed decision by 25 basis points in line with expectations.On December 16, the fed announced the latest resolution rate, interest rate hike of 25 basis points, to 0.25% - 0.25%, in line with expectations.The federal reserve to raise interest rates for the first time in nearly 10 years, according to the fed believe the U.S. economy has been basically overcome the financial crisis in 2007-2009 caused pain, ended a decade-long, about whether the economy is strong enough, can cope with the rising cost of borrowing.Resolution, according to the policy statement for the participating members unanimously.

    Market comment on the details of the fed decision and yellen testimony."The news agency" Hilsenrath argues that the fed raise short-term borrowing costs, which marks the ending of the era of zero interest rates.During the 10 years when interest rates are at zero, the fed has experienced extraordinary policy experience, finally mixed effect.Since the 2008 financial crisis, despite the fed's efforts to the implementation of the policy stimulus, but the expansion of the U.S. economy is neither a amazing, also did not appear after critics fear cataclysmic event.

    Hilsenrath also said the fed officials agreed to raise interest rates by 25 basis points, it is likely to beEmerging marketsConstitute a new pressure, especially these emerging countries have a large number of dollar loans enterprise, its debt burden will increase;The fed emphasized to raise interest rates next action will step by step, the concrete path to raise interest rates more likely depends on the level of inflation.

    Citi analysts said, "in the past two weeks to clean up after parts, the dollar against the euro positions there's almost no change. It shows that the federal

    reserve to raise interest rates for the first time in a decade later, it was some money and credit, and other emerging markets are more likely to have action, rather than to large currency pairs."

    The FrenchSociete generale(601166,Stocks!) strategist Kit Juckes said, "at least on the surface, the market is expected to raise interest rates before the fed statement, because have to digest the factors, so a more relaxed, I think, for a long time for the United States economic momentum, bond yields will rise slightly, but this will depress the euro."

    Charles schwab, fixed income strategist Kathy Jones said, "the dollar edged up, bond yields up slightly, but not increase, so far, the market performance in line with expectations. Consistent with our expectations. We see a stronger dollar. I yield curve steepened, rather than a flattening of the surprise, it may be that the decision makers of a part of the expected suggests that economic growth will slow. Not slower than most people expected, but slower than some people expected. The yield curve steepened amplitude is small, but over the next few days, could become a flattening of the back."

    Danheckman US Bank U.S. investment consultant Dan Heckman said, "I think the fed will adopt a more hawkish stance during the first half of next year, after will become more moderate, is because the relations of time, when the election will come. In the second half of next year, the fed only see data significantly improved decision to raise interest rates."

    Dan Heckman said, "the fed said in a statement many times mentioned that the current inflation is still 2% below its set goals. Therefore, I hope to hear more about their views on inflation. I believe that janet yellen realized that the job market has

    started to tighten, if wages start to rise, should lead to a series of measures began to climb. If the energy market in the fields of rebound, from the perspective of the inflation situation could improve the speed of faster than the market expected."

    Capital economics economist Paul Ashworth said that the federal funds rate target is likely to hit "as much as 2% before the end of 2016, resolution, the statement highlights the FOMC is willing to maintain flexibility, will respond to future data;Still believe that inflation in the first half of 2016 will rebound faster than expected, the federal reserve, after all, deflationary pressures caused by commodity prices and the dollar began to fade, and the domestic price pressures continue to accumulate.

    The specific content of the federal reserve in December resolution.The fed's policy statement pointed out that the policy outlook, after the rise, the fed policy is still stay loose."Dot matrix figure", according to the resolution two officials are not expected to raise interest rates in 2015, the investment has been implemented to normalizing interest rates again.Overnight reverse repurchase will only be limited to the Treasury SOMA valuations.The real interest rate paths will depend on the economic outlook and data.

    Economic outlook, the federal reserve has said that the economic moderate expansion, the housing market improves, balance economic and employment prospects.The fed expects the policy adjustment of "progressive" will help the U.S. economy.Labour markets, the federal reserve has said that, earlier leave unused in the labor market since 2015, "clearly resolve".Inflation, the fed kept reasonable confidence with inflation rose to 2%, will carefully observe the actual inflation expected the development process.

    The fed also released its latest economic outlook.The FOMC economic forecast shows that: the fed to raise interest rates suggests that 2016 speed is consistent with the forecast in September;Cut the federal funds rate is expected to 2.4% by the end of 2017, is expected in September to 2.6%;Maintain long-term interest rates unchanged at 3.5%.

    The fed cut the unemployment rate is expected to 4.7% in 2016, is expected in September to 4.8%;Maintain long-term unemployment rate unchanged at 4.9%.The fed cut PCE inflation expectations in 2016 to 1.6%, is expected in September to 1.7%;PCE inflation is expected to rebound in 2018 to 2% of the target.The federal reserve raised GDP is expected to grow by 2.4% in 2016, September is expected to increase by 2.3%.

    The federal reserve's latest rates lattice figure suggests that the next annual average at around 1.5, is likely to raise interest rates four times, the faster than the market had expected, the dollar was supported.

    The fed's interest-rate expectations lattice figure

    The fed chairman yellen held a press conference after the resolution.Yellen news conference, the fed's yellen speech explains the content of the resolution, in the thought that the U.S. economy gradually to good at the same time, also talked about the labor market still have improve space, salary is not speed up, a stronger dollar and overseas factors influence, further policy direction is determined by the data.In yellen speech, the financial market turmoil, but never out of a more definite trend.

    Yellen told a news conference pointed out that:

    For future policy routing problem.Yellen said to raise interest rates, easing is appropriate.The fed's decision to end the period of unconventional monetary policy, raising interest rates approved U.S. economic growth continues.Postpone raising rates too long can lead to the risk of sudden squeeze.The federal reserve to raise interest rates is likely to be a gradual process, monetary policy is still loose after raising interest rates for the first time.

    Yellen, points out that the federal reserve interest rate expectations that some members cut rates path, interest rate path depends on the data.The federal funds rate is expected at the end of 2018 to nearly normal levels for a long time.The federal reserve will keep a close eye on the market, may adjust policy tools.If economic performance was disappointing, we will take more policy easing.

    On the wage and employment problems.Yellen, according to the Labour market is still further improve space, steadily improving unemployment problem, 5% unemployment rate is close to the long-term goal, but there is no faster wage growth, Labour market still exists some cyclical weakness, the Labour market participation is still weak.Yellen said that the unemployment rate will decline further next year, after the flat.The decrease of labor market slack should help push up inflation.

    The domestic economy.Yellen, points out that the U.S. economy moderate recovery, the economy is still have a relaxation.The importance of raising interest rates for the first time should not be overstated.The influence of monetary policy should take time to reflect on the economy.Trend is expected to more than economic growth will help to achieve target price.Yellen believes that the U.S. economy potential was quite healthy, U.S. manufacturing and energy must be under pressure.She have confidence in America's economic fundamentals.

    Questions about inflation.Yellen said, expectations of economic growth to support the confident in inflation, the inflation below the target level in large part due to energy prices.As the temporary factors, inflation will rebound, inflation confidence depends on the anchoring of inflation expectations, long-term inflation expectations, the overall stability.The dollar force the inflation pressure, but the effect is temporary, inflation this year most of the time is low.

    For the recent decline in oil prices, yellen said she was surprised to the fall in oil prices.Yellen think, oil prices stable can reduce the impact on inflation, prices need to stabilize, a drop in oil prices is limited.

    About the future overseas.Yellen, points out that risk of overseas situation brings to the economic growth, but overseas risk has fallen since the summer.

    The U.S. economic data were mixed, with influence on the market is limited.The U.S. housing market data performed better than expected, and industrial production and manufacturing PMI performance was less than expected.Specific data show,

    The building permits in November 1.289 million, and the highest in five months, expected 1.15 million, value before 1.161 million.Permits November month rate was 11.0% in the United States, expected to 1.0%, before the value is 5.1%.U.S. housing starts in November 1.173 million, is expected to 1.13 million, before the value from 1.06 million to 1.062 million.U.S. housing starts in November month rate is 10.5%, 6.6%, 12.0% before.

    Analysis pointed out that the us housing starts in November data from seven months lows, and up to 5 months to high, show the current usThe real estateMarket growth will add more confidence to the federal reserve to raise interest rates in December.Once the federal reserve to raise interest rates will be open for the first time in nearly 10 years, but now does not think that higher interest rates will cause adverse effect on the real estate market.

    Industrial output in November month rate - 0.6% in the United States, for the third consecutive month of decline, and creates the biggest one-month drop since March 2012, expected to 0.2%, 0.4% before.Analysis thinks, this data is not as good as expected, recorded for three consecutive months of decline, the decline in output mainly comes from public domain, the industry index fell sharply 4.3%, probably because the weather is warmer, less of heaters and air conditioners, but also affected by the global economic slowdown.This data suggests that the United States in the fourth quarter the economy may be a little weak.

    The December Markit manufacturing PMI initial value 51.3, expected 52.6, 11 from 52.8.Analysis pointed out that the United States in December Markit decline in manufacturing PMI data signaled the U.S. economic growth seems to have lost momentum.A stronger dollar led to the trend of weak exports and encourage imports in the short term will not stop.The manufacturing PMI data showed the U.S. manufacturing sector growth there were signs of stagnation;Lower oil prices hurtThe energy industry, restrain the factories and machinery and equipment investment demand.

    The euro against the dollar dropped to 1.09, mainly by the federal reserve's decision, the euro zone economic data released by the performance is good, reflects the good recovery.

    The fed decision did not cause the euro volatility.Analysts said, because most of the positioning of the fed's resolution before action has been completed, is not affected by a lot of cash flow.Just two weeks ago,The European central bank (ECB)Decided to deposit interest rates further cut in negative territory, and extended

    the asset purchase program for six months.The European central bank (ECB) brings to the market volatility is much larger than the fed.

    ING, a senior economist Martin Van Vliet interest rates before the fed decision means that the European central bank will pay close attention to the euro zone government bonds and the euro's response to the fed's decision, because the two markets is vital for the European central bank's monetary policy transmission. If the fed's policy stance not as gentle as expected, yield is expected to rise, thus raising the yields, means that tightening financial conditions, it will not be pleased to see the ECB."

    Prospects for the European central bank's policy.The European central bank management committee Villeroy DE Galhau public comments on the same day, saidThe exchange rateIs not a monetary policy goals, but the euro against the dollar to the euro zone fell competitive brings positive effect.The United States and the euro zone's current monetary policy does not exist too big differences.The policy of the European central bank has provided many stimulus measures, after the European central bank (ECB) measures the market overreaction.

    The euro against the dollar figure shows an hour

    Overall performance is good, the euro zone economic data shows that the euro zone good recovery.Among themThe FrenchGermanyAnd the euro zone's

    manufacturing PMI performed better than expected, in addition, the eurozone inflation data also has a small signs of recovery.

    Specific data show that France on December manufacturing PMI initial value 51.6, expectations of 50.6, before the value of 50.6., which is expected to French services PMI initial December 50.0 50.8, before the value of 51.0., which is expected to France on December the composite PMI initial 50.3 51.0, before the value of 51.0.For French data analysis, points out that under the influence of the fear of attack on November 13, Paris, France, the French business activity slowed in December near stagnation, the service sector also fell sharply;December manufacturing PMI data while the French have improved, but the dominant services sector activity signs of a significant slowdown, drag down the overall decline in private sector business activity.

    German manufacturing PMI initial value 53.0 in December, expectations of 52.8, before the value is 52.9;Germany December services PMI initial value 55.4, expected 55.5, before the value is 55.6;Germany December composite PMI initial value 54.9, expected 55.0, before the value of 55.2.For the German data analysis thinks, Germany December private sector growth is slowing, but overall is still in the high level;As the New Year is coming, the German business needs strong, PMI has 32 consecutive months in the 50 threshold line above;The end of December and January's data is usually a volatility;But as a whole will not deviate from the healthy development path.

    The euro zone's manufacturing PMI initial value 53.1 in December, expectations of 52.8, before the value is 52.8;The euro zone's services PMI initial December 53.9, 54.0, before the value is 54.2;The euro zone composite PMI in December initial value 54.0, expected 54.2, the value of 54.2.For the euro zone data, analysis, points out that although the data better than expected, but the market is generally believed that the data should be more beautiful, it gives the eurozone policymakers to signal, namely the European central bank easing measures did not achieve expected utility, should strengthen loose again.

    Market focus on euro-zone inflation data performance than expected.On November CPI data showed the euro zone rate - 0.1% - 0.2% expected, former value 0.1%;Annual final value 0.2%, 0.1%, the initial value of 0.1%.In addition, the euro zone's core CPI in November at an annual rate of final value 0.9%, 0.9%, 0.9% initial value.Analysts say,The European UnionBureau of statistics released by the euro zone were raised on November inflation at an annual rate of final value, reflect the service price growth expectations from 1.1% to 1.2%;This will give the European central bank policy determines some comfort, but under the influence of energy prices, the euro-zone inflation below its 2% target level there is a way to go.

    Gold shock after the federal reserve to raise interest rates rise, the market appeared some short-covering positions.Gold prices rose on Wednesday, before the federal reserve to raise interest rates for the first time in nearly 10 years, in line with market expectations, and made it clear that this is just the beginning of tightening cycle "gradually".

    The spotGold rose 1.2%, to end at 1072.71 dollars per ounce, below the high of the day $1078.20.Silver surged 3%, to $14.16 an ounce and $13.60 this week fell to their lowest level in more than six years.

    The federal open market committee (FOMC) raised its benchmark interest rate interval by 25 basis points, to 025% - 025%, over a decade, about whether the economy is strong enough, can cope with the rising cost of borrowing.

    BMO Capital Markets in New York, the basic and precious metals trading department director Tai Wong said, "the gold price, because of the tone of moderate policy statement cut economic forecast and decision makers to weaken the effect of raising interest rates for the first time in nine years, the market reaction to calm, indicates that gold prices to $1078 above the earlier today, the most pessimistic short positions have been sold."

    Spot gold figure shows an hour

    So far this year, gold prices have dropped almost 10%, mainly from record lows, on speculation the U.S. interest rates would boost the dollar, lead to hold the opportunity cost of interest-free gold rise.The fed's policy statement was released, the global stock market volatility rises, the dollar and Treasury yields to rise.

    AvaTrade, chief market analyst said in an E-mail, "there is no doubt that this is the most" dove "to raise interest rates.""Step by step the word is now the most popular one word, because the fed in its policy statement USES the word twice."

    The analyst pointed out, "the statement and the fed's policy has confirmed one thing, that is they will work to keep the balance sheet in the current scale, and will remain very loose policy stance. However, if the U.S. jobs report shows some signs of hawks, while inflation began to accelerate, then the picture would change at very fast speed."

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