Fed Meeting Leads To Stock Increases and Falling Dollar
U.S. stocks went up and the dollar fell against the yen and euro after minutes from the Fed meeting last month were released.
The meeting suggested that the pace of interest rate increases won’t sped up by the central bank.
According to a Financial Times article,
“Analysts said that Tuesday’s move higher after the US trade data release was more confirmation that market sentiment had moved away from structural inbalances in the US economy to focus on interest rate differentials between the world’s major economies. It was the release of minutes from March’s FOMC meeting later on Tuesday that was holding the market’s attention as traders looked for signs that the Federal Reserve was considering more aggressive monetary tightening.
However, according to analysts, the minutes appeared to leave the market more confused than ever on the path of interest rates in the US. The market latched on to comments that an ‘accelerated pace of policy tightening did not appear necessary at this time’, while downplaying the significance of comments over the removal of the word “measured pace” from its policy statements, which some Fed members believed restricted the central bank’s room to manoeuvre.”
Many believe that total inflation will diminish and any increase in core consumer inflation will be limited.
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