Futures point to lower open for U.S

“Most peoples’ expectations are that we’re going to get a hike by the end of the year, and the Fed [statement] today didn’t do anything to change that narrative”, said Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer’s Investment Research Inc.

As the Fed released Wednesday’s statement, “Gold closed near $1095 for the eighth consecutive day”, notes bullion market-maker Scotia Mocatta, and is “now flat-lined after the $100 drop from $1200”.

And they made “a subtle but potentially important shift” in a key condition to an interest rate hike, said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Commenting on the Federal Open Market Commitee’s decision, Michael Gapen at Barclays had this to say: “The characterization of labor markets and inflation suggests the committee does not see much slippage in its inflation outlook and is closer to its objective on labor markets“.

The Center for Popular Democracy has criticized the Fed for not focusing enough on wage improvements as a factor in deciding when to raise rates.

It’s not much of a word, “some“.

Yellen has stressed that when the Fed begins to raise rates, it will do so only gradually.

Also, while the labour market has seen improvement in pay, official data recently showed the first rise in unemployment for more than two years. The Fed typically has raised rates when it perceives a need to prevent inflation from getting out of control.

The economy continues to grow at a “moderate” clip, the Federal Reserve said, although it noted that the consumer price index edged up just 0.1% in the 12 months through June and that inflation remains below the Fed’s medium-term target of 2%. There was no mention of global problems, as the European debt crisis has returned to a low boil, and the Fed once again expressed confidence that inflation would climb back toward the Fed’s target pace of 2 percent a year. However, the members would like to see a little more improvement in the labour market to take a view on the rate hike decision. Markets aren’t pricing in a second rate increase until June 2016, according to Royal Bank of Scotland Group Plc.

“If we don’t see 3% or 4% GDP in the latter six months of the year, the Fed really doesn’t have a leg to stand on to justify a near-term rate hike”, Piegza added.

The central bank has kept its benchmark federal funds rate near zero since December 2008 to help boost economic growth during and after the Great Recession. He believes a rate hike is still possible in September, but he said the odds are not as good following Wednesday’s statement.

Gross domestic product grew 2.3 percent, thanks to an increase of exports and drop in imports, the Department of Commerce said Thursday. Analysts are forecasting that the economy expanded at a 2.9% annual rate in the second quarter.

The euro to dollar exchange rate is 0.6 pct lower on the previous day’s close at 1.0917.