(As of 7:25 am PST)
US stocks opened higher today with investors taking positions ahead of this afternoon’s key
policy meeting from the Federal Reserve.
At 2 p.m. Eastern today, the FOMC will announce its new policy statement
and updated economic forecasts which will include a key interest rate decision.
Many believe the Fed will stick to its plan of keeping interest rates low until
at least 2015, but how Fed Chairwoman Janet Yellen and the FOMC communicate the
plan for a future rate hike will be under the microscope. Stocks sprinted to
the upside in the first hour of trading, after a report showed consumer prices
falling 0.3% in November, the largest monthly drop in six years. Sharply
falling energy prices led to the decline, as lower gasoline prices helped the
American consumer last month. The lack of inflationary pressure in recent
months also reduces pressure on the Fed to raise short term interest rates,
perhaps one of the reasons stocks are moving higher today. Global turmoil is
keeping a lid on this morning’s gains, however. Economic and political
uncertainty in Russia and Greece is adding to the wide scale volatility we’ve
seen in recent weeks as a result of collapsing oil prices. European markets
spent most of the day in the red, while Asian indexes finished mixed. This
afternoon’s press conference with Janet Yellen and the Fed, has the potential
for shaping market direction for the remaining two weeks of 2014. Hopefully, what the Fed says will be enough to usher in a late December rally.
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