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Fed's Yellen: Lift-Off Likely This Year, Barring More Disinflation

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Saturday, 28 March 2015 04:49

The Chair of the Federal Reserve (Fed) Janet Yellen suggested that 2015 will be the year in which policymakers do away with zero interest rates, unless another bout of disinflationary pressures were to hit or the labor recovery faltered.

"Like most of my [Federal Open Market Committee] colleagues, I believe that the appropriate time has not yet arrived, but I expect that conditions may warrant an increase in the federal funds rate target sometime this year," Yellen told at a conference hosted by the San Francisco Fed.

"A modest increase in the federal funds rate" would be unlikely to hurt the economy although it might "slow its pace somewhat."

Last Updated on Saturday, 28 March 2015 04:51
 
 

Dollar pares gains as U.S. GDP disappoints

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Friday, 27 March 2015 20:41

The dollar pared gains against a basket of other major currencies on Friday, after data showed the U.S. economy grew at a slower rate than expected in the fourth quarter, fuelling fresh concerns over the strength of the recovery.

In a report, the U.S. Bureau of Economic Analysis said that fourth quarter gross domestic product rose 2.2%, in line with a preliminary estimate but below expectations for a growth rate of 2.4%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 97.63, down from highs of 98.20 hit earlier in the session.

 
 

U.S. GDP unrevised at 2.2 percent in fourth quarter; corporate profits fall

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Friday, 27 March 2015 20:25

USD Core Personal Consumption Expenditure (QoQ) (4Q T): 1.1% actual vs 1.1% estimate, 1.1% prior.
USD Personal Consumption (4Q T): 4.4% actual vs 4.4% estimate, 4.2% prior.
USD Gross Domestic Product (Annualized) (4Q T): 2.2% actual vs 2.4% estimate, 2.2% prior.

U.S. economic growth cooled in the fourth quarter as previously estimated, with businesses throttling back on inventory and equipment investment but robust consumer spending limiting the slowdown in the pace of activity.

Gross domestic product expanded at a 2.2 percent annual rate, unrevised from last month's forecast, the Commerce Department said on Friday in its third GDP estimate. The economy grew at a 5 percent rate in the third quarter.

 
   

Next move likely to be a rate hike - BOE’s Carney

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Friday, 27 March 2015 17:27

boe.2Bank of England (BOE) governor Mike Carney, in his speech at the Bundesbank Conference, once again stated that the next policy move by the BOE is likely to be a rate hike. Carney also said that the wealth channel in the US is stronger than that in the UK.

Meanwhile, BOE’s Broadbent also chipped-in, by stating that Likelihood of broad and protracted deflation in the UK is pretty low. In fact, he went further and said that good deflation is helping boost demand and output. Broadbent also said the real household income could rise to 4.0% in Q1, which could boost consumption.

 
 

Pound remains in sell mode ahead of UK elections

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Friday, 27 March 2015 17:12

gbp.coinJonathan Pryor, Head of FX dealing at Investec, comments that the Pound’s sell rally remains intact due to the uncertainty involving the upcoming elections in the UK.

Key Quotes

“The Pound also strengthened yesterday morning on stronger than expected Retail Sales numbers. After falling just short of 1.50 against the greenback, without further reason the Pound lost 1.5 cents, showing again the Pound remains in a sell rally mode, particularly with the uncertain and close run general election under 45 days away. The Sterling trade weighted index remains on the back-foot.”

 
   

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