NY Fed chief declares housing economy solid

The October jobs report considerably beat economists’ expectations, greatly raising the chances of a rate increase from the Federal Reserve in December.

Last week Fed Chair Janet Yellen said the usa economy is “performing well” and that a December rate hike is a ‘live possibility’.

Meanwhile, the report said energy prices came in flat during October after plunging by 5.9 percent in September and 3.3 percent in August. The CME Group’s Fed futures watch tool put the probability of a December hike at 70 per cent.

“The pace of future interest-rate increases is expected to be extremely slow”, Mr. Nelson said.

The euro edged up to US$1.081 (RM4.739) around 10pm from US$1.0741 at the same time Wednesday.

At the end of March, Yellen indicated that the Fed had not done enough to combat unemployment even after holding interest rates near zero for more than five years and engaging in quantitative easing. However, the evidence suggests doing so is still a coin flip, as there is evidence to suggest that they should raise rates and also perhaps stronger evidence to suggest they shouldn’t.

A slew of Federal Reserve officials spoke Thursday, offering clues toward December’s closely watched Federal Open Markets Committee meeting. In January, WND reported fears that tapering QE to zero could cause interest rates to rise, risking a severe market correction.

“While the dollar’s appreciation and foreign weakness have been a sizable shock, the United States economy appears to be weathering them reasonably well”, he said.

“It is quite possible that the conditions the Committee has established to begin to normalize monetary policy could soon be satisfied”, Dudley said, noting a tightening labor market and hopes that inflation will rebound. As though pandering to an unruly child, Chicago Fed President Charles Evans assured us that rate hikes would be gradual and probably reach less than 1% by the end of next year. But they emphasized that they want to move slowly and cautiously because the economy remains unusually weak.

Gasoline prices are down more than 44 percent year-to-date, while natural gas prices are down 31 percent, helping the typical household save $800 a year.

Auto sales, though still at a high level, unexpectedly dropped 0.5%, taking back a portion of the 1.4% increase recorded in September.

Wholesale prices excluding food and fuel dropped 0.3 percent in October.

“While inflation looks odds on to post its lowest rate since March 1960, we do not think this decline will worry the MPC too much, with weak price pressures driven largely by lower energy prices rather than domestic economic weakness”, wrote Ruth Miller at Capital Economics.