Fed Interest Rate Decision:
United States Wed, Jun 13, 2018
The Fed has a surprise in store that could mean an early end to interest rate hikes
By Jeff Cox | @JeffCoxCNBCcom
- The Fed at its meeting this week is expected to announce a quarter-point interest rate hike, and a 0.2 percent increase in interest on excess reserves.
- The maneuver is targeted at holding back the target rate, and could signal that the Fed is nearing the end of its balance sheet rolloff.
- A preliminary end to the reduction in the bond portfolio also could signal a quicker end to the rate-hiking cycle than the market anticipates.
The Federal Reserve is almost certain to raise interest rates by a quarter point for a second time this year at the conclusion of its two-day policy meeting at 2:00PM ET (1800GMT) on Wednesday.
That would put the fed funds target range in a range between 1.75%-2.0%, inching closer to a neutral policy stance.
The U.S. central bank will also release new forecasts for economic growth and interest rates, known as the “dot-plot”. The question is whether its rate hike projections – three moves both this year and next – move up and whether it expects to hit the so-called neutral interest rate quicker than earlier thought.
The probability of four total rate hikes in 2018, rather than the three currently forecast by the Fed, have strengthened recently amid signs of rising inflation and strong economic growth.
Crude Set To Fall Further as View of OPEC Production Hike Firms
By Tyler Yell, CMT
- The rebound in crude appears hollow as OPEC is expected to add to the global oil supply. The increase in supplies, which could come online quickly are already pressuring prices and adding to the coming supply, US oil inventories jumped by the most in a decade on higher US output.
- Per BHI, U.S. Oil Rig Count rises by 1 to 862, US total count at 1,062
- OPEC oil output remains in hot contention as Venezuela pleads for OPEC to fight sanctions as their rig count falls on unpaid drillers pulling projects
- The technical analysis picture of crude oil has a focus on the 61.8% at $65.60 that also aligns with the Ichimoku cloud. A breakdown from here, which the fundamentals are beginning to favor could see a broad breakdown toward $60/58 per bbl.
Price of Gold Fundamental Daily Forecast – Pressured by Higher Yields, Increased Demand for Higher Risk Assets
By James Hyerczyk
Gold is trading lower after an earlier attempt to break out to the upside failed to gain traction. Gold moved higher early in the session in reaction to a weaker U.S. Dollar. The Greenback was pressured by the lack of progress at last week-end’s G-7 conference.
Looking ahead, gold could feel further pressure from moderating geopolitical risks ahead of the U.S.-North Korea summit. Tuesday’s U.S. reports on consumer inflation could also keep traders on the sidelines late in the session.
Investors are looking for the CPI to come in at 0.2%. This report is not expected to affect this week’s Fed interest rate decision, which has already been priced into the market. However, a much stronger than forecast report could mean a more aggressive Fed later this year.
The reactions in the Treasury and stock markets today indicate that this week-end’s G-7 meeting was a non-event. If rates continue to rise as well as stocks then demand for risky assets will keep the pressure on gold prices.
Disney Is A Buy For Long-Term Investors
By Anh Hoang
- Disney has been transitioning to a new media distribution trend.
- Disney will be a competitor to Netflix, creating a streaming service for itself.
- The footprint in China and the Fox acquisition would give the company a lot of competitive edge in the future