The United States and interest rates 1/4 quarter before the end of the contract is expected to increase the second half of the afternoon with a steady afternoon
The Federal Reserve announced a rate hike of 0.25%, the federal funds rate added to 1 to 1.25 percent, while maintaining interest rates again this year, and plans to start by the end of the year to reduce the balance sheet to start at $ 10 billion per month.
In the statement after the meeting, the first clear explanation of the pace of the first time, is expected to start when the monthly limit of 10 billion US dollars, respectively, 6 billion US dollars of debt and mortgage mortgage (MBS) 4 billion US dollars; the final limit for the total monthly 50 billion US dollars, respectively, 30 billion US dollars of government bonds and MBS 20 billion US dollars.
The initial table is $ 10 billion per month
Officials are expected to raise interest rates for the next two years, as in March, plus three times this year (ie, the second half plus one) and three more next year.
Although the Bureau lowered its inflation forecast for this year, the core inflation was reduced from 1.9% to 1.7%, but the next two years forecast for 2%, which means still meeting the 2% centerline target.
Janet Yellen, chairman of the meeting, said there was no conclusion, but that everything should be seen at the time of the economic situation. As to whether the Reserve should re-set a 2% inflation target, she said that the benefits and costs of the change must be considered at the same time.
Yale: Suspension of interest rate No see data
The Dow hit the market and closed higher, was up 63 points, at 21,391 points, to close at 21,374 points, up 46 points; index fell 2 points to 2437 points; Nasdaq fell 25 points to 6194 points. New York Yau Mei fell 3.7% to 7-month low, at $ 44.74.
US retail and inflation data compared with the expected difference is poor, indicating that the US economic slowdown, the market interest rate increase in the second half of the expected cooling, the dollar and the US debt fell with the same. US 10-year debt drop by 11 points, low see 2.1013%. The dollar index fell 0.7% to 96.32. The yen has risen 1.1% to $ 108.83 to $ 1.
May consumer price index (CPI) rose 1.9%, lower than the 2.2% in April, and lower than the market expected 2%. Excluding the food and energy core CPI rose 1.7% year on year, with Johnson expected 1.9%.
Gonzalez warned US stocks to fall in the summer
In addition, May retail sales fell 0.3% monthly, worse than the market did not rise or fall, the worst since last January. Last month recorded a wide range of sales fell, including cars and electronics, showing a modest consumer attitude.
In addition, the two generations of debt the same bearish market outlook. “The new debt" Gonzalez explained that the market has been more concerned about the volatility of the market situation, the market has a lot of money on the commonly known as the “panic index" VIX index short positions, has earned a lot of money, but these short positions are too much , Which means that the days of low market volatility are limited and will not last until the end of the year. VIX index fell to 9.37 on Friday, a record since December 27, 1993 low, yesterday’s city rose to 10.5. Oklahoma also predicted that the US 10-year debt to the end of the year will rise to 2.7 to 2.8% level.
Gross is blocked by economic growth on the grounds, bearish outlook. He pointed out in the latest investment outlook, the major global central banks to take a low interest rate or even negative interest rate policy, although pushed up the stock and real estate and other asset prices, but little contribution to real economic growth.
Gross believes that long-term power is now blocking the capitalist arteries, bond debt in a low or negative environment, is hindering the US and global economic growth, so that growth is far below the historical level.