The Fed raised yesterday interest rates by 0.25%.
In a statement issued by the central bank, he expected a further strengthening of the labor market next year and because he’s not expected an inflationary pressures, and it is possible to increase the pace of interest rate increases up to 3 increases a year.
Wall Street opened on a negative trend on the first trading week before the opening meeting of the Open Market Committee of the Federal Reserve (FOMC) tomorrow, when on Thursday the bank is expected to announce the first rate rise in 2016 to 0.5% -0.75%.
Wall Street stock exchanges trading will be conducted this week in anticipation of the US interest rate decision.
The believe in the markets is that the Fed will decide this week to raise the interest rates to 0.5% -0.75% – a year after raising the interest rate last time.
The European interest rate remained unchanged, at 0.00%.
Also, the European Central Bank says it will extend its asset purchase program at 60 billion euros a month, starting in April.
The Asian stock markets are rising as a result of optimism that the global economy is strong enough to withstand an interest rate increases in the US.
Hong Kong rising by 0.4% , Shanghai adds 0.2%, Singapore rising by 0.5%.
The chairman of the US Federal Reserve, Janet Yellen said yesterday in her testimony before the US Congress tha the election of Donald Trump to be the president of the United States has not changed the plans of the Federal Reserve to raise interest rates “relatively soon”
Yellen also said that the economic data currently justify higher interest rates and that if there would be no dramatic changes, the interest rates will continue to rise gradually after that.
The US inflation data released today indicate the sharpest increase in the CPI in the US for six months.
The increase was recorded mainly due to increased fuel prices and rents, and it seems that the Fed was waiting for those data to be able to start raising the interest rates again in December – a year after it raised last time.
According to Labor Department data, the US consumer prices in October rose by 0.4% compared to September, and at an annual rate of 1.6%.
This is the sharpest annual increase since October 2014.
In September, the index increased by 0.3%
Another statistic that may delay the interest rate in the US is the core inflation, the CPI excluding energy and food, which is the main measure pursued by the Federal Reserve.
The core’s inflation rose in October by 0.1% compared to September, and the annual core inflation rate slowed to 2.1% compared to 2.2%.
The future contracts on Wall street are signalling on a price declines at the start of the new trading day in the USA.
The trading on Wall Street stock markets ended yesterday with declines, after the interest rate decision at the Open Market Committee of the Federal Reserve.
As expected, the interest rate was left unchanged in the range of 0.25-0.5 percent.
In a daily summary, the Dow Jones fell by 0.3%, the S&P 500 was down by 0.6% and the Nasdaq retreated by 0.9%.
The trading on Wall Street is conducted with declines ahead of the rate decision, tonight, at the Open Market Committee of the Federal Reserve, which expected to leave it unchanged in the range of 0.25-0.5 percent.
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