Canadian dollar strengthens ahead of Fed decision as oil prices climb

Canadian dollar strengthens ahead of Fed decision as oil prices climb

The dot plots suggest that it will take a year longer to reach the Fed funds to reach their neutral rate, which it lowered to 2.75% from 3.0%. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance. On the Nasdaq, 1,515 issues rose and 1,177 fell.

The Russell 2000 is up 13.71 points, or 1 percent. Several packaged food companies also declined.

While the United States economy and especially its labor market has been relatively strong - unemployment has been below 5% since early 2016 - there has not been much indication that prices are starting to seriously accelerate, which traditionally prompts the Fed to pull back the reins and raise rates.

The pan-European FTSEurofirst 300 index lost 0.09 percent. And when I say inflation is misbehaving, I am not talking about a jump in prices that would, in the past, have warranted higher interest rates or the threat of them.

Despite. stronger- than-expected CPI report, Fed officials will still be looking at year-over-year core PCE and CPI inflation rates that are three tenths and five tenths lower, respectively, than in March. The domestic second-quarter gross domestic product data didn't move the market after the 0.8 percent on quarter growth was in line with expectations.

Japan's Nikkei gained 0.8 percent as a rise in US bond yields lifted financial shares, while the yen's fall against the dollar after the Fed's decision helped exporters.

The Dow is up 2,649.99 points, or 13.4 percent.

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Fed officials have been signaling for months that they planned to start reducing the Treasury bonds and mortgage-backed securities the central bank began buying in 2008 to try to stimulate growth by pushing down mortgage and other long-term interest rates.

Some Fed officials have questioned whether the central bank should continue raising rates, which it typically does to forestall inflation, at a time when price growth remains so low. Raymond James Financial rose $1.15, or 1.4 percent, to $82.32.

"Higher prices for gasoline and some other items in the aftermath of the hurricanes will likely boost inflation temporarily", the Fed warned in its statement. The Fed views the job market as strengthening, but it notes that inflation is running below its 2 percent annual target.

In late NY trading, the euro fell to 1.1895 dollars from 1.1998 dollars in the previous session, and the British pound lost to 1.3485 dollars from 1.3523 US dollars in the previous session.

However, 12-month inflation is still expected to remain below the Fed's two percent goal in the near term, stabilizing at the target rate only in the medium term.

In currency markets, the dollar hit an eight-week high against the yen, trading up 0.55% to 111.44, with investors moving out of the safe-haven Japanese currency as tensions between the USA and North Korea eased.

Among metals, gold gained $5.80 to $1,316.40 an ounce. Toshiba stock was up 0.32 percent in early trade. The FTSE 100 index of leading British shares was flat. The 10-year U.S. Treasuries yield rose to 2.278 percent, briefly hitting a six-week high of 2.289 percent. Hong Kong's Hang Seng posted slim gains. Australia's S&P/ASX 200 fell 0.1 percent.