Consumers Should Prepare for Higher Interest Rates

Federal Reserve officials were unusually explicit in their statement, released yesterday following a two-day meeting in Washington, indicating that a disappointing first quarter wouldn't knock the committee off its path to raise rates two more times this year after a hike in March.

While the central bank was widely expected to hold interest rates, investors were eyeing any hints on the pace of future rate hikes. Still, consumer spending and factory output have slowed, and inflation remains below the Fed's target rate.

"We don't expect that will prevent the Fed from hiking interest rates again at the June meeting, at least not as long as employment growth rebounds in April and May", said Paul Ashworth, chief USA economist at Capital Economics in Toronto.

Benchmark 10-year notes last fell 5/32 in price to yield 2.3144 percent, from 2.296 percent late on Tuesday.

The Federal Reserve has left its benchmark interest rate at a still-low level near 1 percent while signaling that it expects a resilient USA economy and solid job market to justify higher rates later this year. Prices for USA government bonds were trading lower, while the dollar was marginally lower. However, the government report also showed that gasoline demand fell 2.7 percent over the last four weeks from the same period a year ago. A slowdown by consumers was a major reason overall economic growth slowed so sharply over the winter.

But if either inflation or inflation expectations edge too much lower, expect the dovish chatter to begin returning from some of the Fed's more influential quarters.

Damascus accepts Russian proposal of creating de-escalated zones
In the latest round of talks there, representatives of Syria's armed opposition said they were suspending their participation. He stressed the importance of not destroying "the opportunity of good news" related to this issue.

After sliding lower following Wednesday's Federal Reserve statement, gold remained on the defensive in Europe on Thursday. The Trump administration last week proposed a tax plan that includes cutting the corporate income tax rate to 15 percent from 35 percent, but offered no details.

The core PCE is the Fed's preferred inflation measure. However, the language in its monetary policy statement was not enough to convince traders that a June rate hike was off the table.

The U.S. added just 98,000 net new jobs in March, the fewest in a year, although economists said weather was probably a factor.

"The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal", the central bank said in a statement.

Economists have largely attributed the weak first-quarter GDP reading to recurring issues with the calculation of growth during the January-March period and linked the pullback in hiring to weather.

US consumers cut back sharply on buying durable goods such as autos in March, leaving overall spending unchanged for a second straight month.

Related:

  • The dark side of May 4: Storm trooper causes alarm at school

    The dark side of May 4: Storm trooper causes alarm at school

    His parents gave it to him at birth in 1978, less than a year after the original " Star Wars " came out. Students were evacuated from the school and were transported to the middle school and a nearby church.
    PlayStation 5 Could Launch in 2018

    PlayStation 5 Could Launch in 2018

    With the release of the PS4, Sony has switched to x86 architecture with AMD chips, similar to Microsoft's Xbox One. More so considering how well the PS4 is selling, tracking in line with Sony's most successful console, the PS2.
    VW Q1 profit jumps 40% as brand cost cuts materialize

    VW Q1 profit jumps 40% as brand cost cuts materialize

    The Group's financial result rose by Euro 0.5 billion to Euro 0.3 billion. It's also starting to weed out a convoluted sales structure.
  • Global gold demand declines in first quarter of 2017

    Global gold demand declines in first quarter of 2017

    Jewelry remained relatively weak in historical context and it was steady at 480.9 tons because of rising gold prices, it said. The total supply of gold in the three months to March 30 was a 12 %-lower 1 032 t, mainly on a 21% recycling fall to 283 t.
    United top four hopes dealt blow by plucky Swansea

    United top four hopes dealt blow by plucky Swansea

    United could still finish this season with the EFL Cup, Europa League and a place in the top four of the Premier League. United are also now without Zlatan Ibrahimovic, Marcos Rojo, Juan Mata , Chris Smalling and Phil Jones .

    You just can not miss these sizzling pictures of Katrina Kaif

    Dhoni - The Untold Story star Sushant Singh Rajput, Katrina Kaif features as the magazine's main stay in a special photoshoot. The actor has four films lined up for the year - Raabta , Drive, Romeo Akbar Walter (RAW) and Chanda Mama Door Ke .
  • Jay Cutler Auditioning For Broadcasting Jobs

    Jay Cutler Auditioning For Broadcasting Jobs

    Of course, despite multiple teams needing quarterbacks this offseason, none elected to go with the 34-year-old Cutler. There are no readily available football media jobs that would be a slam dunk for him that come to mind.
    Another ISI agent arrested

    Another ISI agent arrested

    During the ATS raids, a mobile and approximately Rs 70 lakh were recovered from the possession of Altaf Qureshi, claimed the ADG. ATS sources said Aftab had gathered information on several army cantonment areas and defence establishments in the state.
    Gylfi Sigurdsson says Swansea can pounce if Hull slip during relegation run

    Gylfi Sigurdsson says Swansea can pounce if Hull slip during relegation run

    Luke Shaw's season could be over after suffering a badly bruised foot against Swansea, sources have told ESPN FC . Jamie Carragher questions Jose Mourinho's complaints about Manchester United's busy fixture schedule.
  • Swachh survey: Indore tops list of India's cleanest cities, Bhopal comes second

    Swachh survey: Indore tops list of India's cleanest cities, Bhopal comes second

    Cities in West Bengal have not been ranked as the Mamata Banerjee government did not participate in the Swachh Survekshan . Naidu also noted that India had improved its position by 12 places in the global Travel and Tourism Competitive Index.
    US trade deficit improves slightly in March

    US trade deficit improves slightly in March

    Exports of those products rose 9.5 percent to $95.6 billion while imports increased 6.2 to $106.7 billion. Offsetting that gain was a 1.8% drop in the auto-related exports, to C$7.72 billion.

    Bottas beats Vettel for 1st F1 win in Russia

    Asked Raikkonen. "He was leading the race, Kimi", simply replied his engineer. Bottas said: “Lewis said he was happy for me which was very nice from him.

Comments

Latest news

USA economic growth slows to weakest rate in 3 years
The New York Times noted that the drop in spending followed a large increase in Q4 2016, and was an inevitable reversal. The data are unlikely to dissuade Federal Reserve policy makers from raising interest rates in the coming months.

One student airlifted after school bus crash north of Bemidji
Sanford Health officials said people may also report to Sanford Bemidji Medical Center's Education C room, 1300 Anne St. They were on their way to Northern Elementary, when a passenger vehicle ran a stop sign and hit the side of the bus.

Transactions: Jets cut starting safety Marcus Gilchrist
Coming over from the Chargers in 2015, Gilchrist played free safety across from Calvin Pryor in New York's secondary. He appeared in 29 games for the Green & White at safety, registering five interceptions and 10 passes defended.

Young Yankees Fans Celebrate Wildly After Aaron Judge Gives Them A Ball
Overmatched Blue Jays righty Mat Latos (0-1) allowed seven runs and 10 hits, including four homers, over four innings. The only other instance was when Mel Hall and Jesse Barfield went deep twice on May 27, 1991 against the Red Sox.

Jane Goodall is none too pleased with Ivanka Trump quoting her.
In it, she reveals Vogue editor Anna Wintour called her up during Trump's senior year of college to offer her a job. Ivanka Trump is a White House adviser and an unpaid federal employee with a West Wing office.

'Morning Joe' hosts Joe Scarborough, Mika Brzezinski engaged
Scarborough and Brzezinski have been sitting together on the set of " Morning Joe " for 10 years. "And then he asked, and I said, 'Absolutely'".

Year later, charge dropped against Flint water official
The liens threatened by the city, if implemented, represent the first step in making a claim on an individual's property. If they don't pay up their back dated water bills, not only will their taps be shut off but they may lose their homes.

Egyptian woman sheds 50 percent weight, leaves India
The hospital had alleged that Shaimaa tried to put water in Eman's mouth, despite being told that she must be fed by tube only. A green corridor was created for transporting Eman from Saifee Hospital to Gate No. 5 of Terminal 2 at the airport.

Hot Samsung Galaxy S8 Deals to Keep an Eye On
German testers from test.de have put the Samsung flagship in their special testing drum, and it broke faster than other devices. Going by the same, the renders of the Note 8 also show the S Pen popping out from its slot at the bottom of the device.

Happy Press Freedom Day, Now Stop Calling Trump a Cheeto
She said: "Today, I call on everyone to sharpen their minds to defend the freedoms that are essential for justice and peace". All the journalists were found to be regularly engaged on social media platforms with 95% of them engaged professionally.

FBI director 'feels nauseous' over Clinton emails
Comey confirmed in March the FBI was investigating possible collusion between Trump surrogates and Russian Federation . Comey was asked if he was looking into whether FBI agents may have leaked information about the Clinton investigation.

Trump to meet Australian PM on 1st presidential trip to NYC
The president's wife, Melania Trump, and his son, Barron, have been living in NY since he took office. Additionally, city officials have portrayed security costs at Trump Tower as a financial burden.

Trump signs executive order to expand offshore oil drilling
It also directs Zinke to review the locations available for offshore drilling under a five-year plan Obama signed in November. FILE - In this May 14, 2015 file photo, the oil drilling rig Polar Pioneer is towed toward a dock in Elliott Bay in Seattle.

Taliban announce spring offensive 1 week after Afghanistan massacre
The attack occurred in the same area where two weeks ago the US dropped its largest non-nuclear bomb on an IS complex. The Taliban would also focus on developing areas "cleansed from the enemy", the statement said.

Hillary Clinton opens up about what cost her election
The popular vote has been a source of contention with Trump, who argues that he essentially won the popular vote over Hillary. Clinton gave her inspirational speech in a room full of 1000 people - mostly women - including fellow fighter Meryl Streep .

Other news