Interest rate hike could soon be warranted, Fed officials say

USA stocks were lower on Wednesday as investors held off from making big bets ahead of the release of the minutes of the Federal Reserve’s July policy meeting. Tech and telecom firms shone. “By December, there is a near even chance that the data that will edge one or two more “doves” into the hiking camp will have materialized”.

Even the struggling British pound rose, jumping to a two-week high of US$1.3150 after United Kingdom retail sales for July beat forecasts, showing little sign that British shoppers had been affected by the Brexit vote.

The Fed left interest rates unchanged at its meeting last month but said near-term risks to the economy had diminished, leaving the door open for a possible rate hike this year.

“For the first time in quite a while, gains in middle-wage jobs actually outnumber gains in higher- and lower-wage jobs nationwide”, said Dudley, a permanent voter on USA interest rate policy and a close ally of Fed Chair Janet Yellen. The Fed is not expected to hike rates in September, but could act at least once before the end of the year.

The latest minutes from the U.S. Federal Reserve did little to move North American stock markets Wednesday, as traders found themselves still looking for more direction on interest rates. The Nasdaq composite inched up 1.55 points to 5,228.66.

Yields on Japanese debt sunk deeper into negative territory after steady investor demand was seen at an auction of five-year government bonds.

European markets were higher today, with the Spanish Ibex Index rising 0.16 percent, STOXX Europe 600 Index gaining 0.50 percent and German DAX 30 index gaining 0.36 percent.

Wall Street recovered. In 3.06pm trading in NY, the Dow Jones Industrial Average eked out a 0.02% gain.

The euro traded at $1.1301, near Tuesday’s seven-week high of $1.1323. A subsequent weakening in overseas economies and a moderation in United States growth sent bond yields (TLT) lower despite a tightening bias at the Fed.

The weaker dollar was an additional help to commodities like crude oil, although oil prices dipped in early trading on the prospect of record Saudi output.

International Brent crude oil futures LCOc1 were at $49.67 per barrel at 0050 GMT, down 18 cents from their last close.

Copper, which had slid on the dollar’s rise earlier in the week, trimmed some of its losses as the USA currency flagged. Britain’s FTSE 100 gained 0.1 percent to 6,862.

Investors look at computer screens showing stock information in Shanghai, China.

A number of Fed policy makers have suggested in public comments since the last meeting that it will probably still be appropriate to raise interest rates at least once this year, with some indicating a move could come as soon as the FOMC’s September 20-21 gathering.