FTSE hits 28-month low after Fed raises rates again

Federal Reserve raises interest rates, signals fewer hikes ahead

Federal Reserve raises interest rates, signals fewer hikes ahead

And as USA interest rates have risen, loan-sensitive sectors of the economy, from housing to autos, have begun to weaken.

Rather than sticking with its plan for a string of locked-in rate hikes next year, the Fed instead appears to be favoring a more flexible approach, signaling its intention to watch and see how the economy performs over time slowly before determining the future path of policy.

United Kingdom shares on Thursday fell to their lowest in more than two years after the US Federal Reserve bank raised interest rates for the fourth time this year, sending global stocks spiralling down. But it's likely to do so at a slower pace.

The change to the Fed's tone is a nod to the increased uncertainties, slower global growth, lower inflation, and inflationary expectations, tighter financial conditions, and the flatter yield curve since it last published its Summary of Economic Projections (SEPs) following the September FOMC meeting.

Financial stocks, which account for over a third of the benchmark index weight, led losses with the financial index down 1.2 per cent for its third straight week in the red. "I am very concerned". But a shift toward "data dependence" means more guessing from investors going forward about just how fast the Fed plans to raise rates to keep the USA economy from wobbling. In a Fox Business interview, Mnuchin said that he believed markets were disappointed in Powell's comments at a news conference following the meeting.

The Fed signaled "some further gradual" rate increases and no break from cutting its massive bond portfolio. No longer will the Fed be able to signal weeks in advance the near-certainty of a shift in rates.

Fed Chairman Jerome Powell speaks at a news conference after the Federal Reserve announced it was raising its key interest rate for the fourth time in 2018. The so-called federal funds rate now stands at a range between 2.25 percent and 2.5 percent. Those estimates are far below the Trump administration's insistence that its tax cuts would help accelerate annual growth to 3 percent in coming years. They indicate that they're not about to hike rates aggressively unless the economy grows quicker.

The Treasury secretary said investors were also overly anxious with the Fed's current program to trim its balance sheet from the $4.5 trillion record level it hit when it was buying Treasury securities and mortgage-backed bonds to lower long-term rates. And he later added that he expected further acceleration in workers' earnings. The Fed lowered its estimate of the natural rate of unemployment only slightly to 4.4% from 4.5%. Barring huge gains during the upcoming holiday period, this will be the worst December for stocks since 1931.

The S&P 500 fell 39 points, or 1.6 per cent, to 2,467.

Netflix Jokes About Facebook Data Breach and Users Aren't Happy
Furthermore, Amazon was permitted to access various users' names and contact information through their friends without consent. The agency said in March it was looking into whether Facebook engaged in unfair acts that might have violated the decree.

Benchmark 10-year Treasuries retreated after steep gains on Wednesday.

"There's just confusion from the Fed, investor sentiment is fragile, and with the government shutdown, add the Mattis resignation, and it's been a parade of concerning news that increased investors anxiety Thursday", Lynch said. Their fears seem to be coming from several fronts: the US trade conflict with China; slowing global growth, particularly in China; and uncertainties about Britain's deal to exit from the European Union.

Given the still-healthy US economy, the Fed would normally keep gradually raising rates to make sure growth didn't overheat and ignite inflation.

All these factors could influence the performance of the economy and how many more rate hikes the Fed will impose.

Trump has been relentless in making his feelings on the issue public.

Yardeni said Fed officials need to get on the same page.

Responding the criticism from the White House, Powell told reporters that "political considerations play no role whatsoever" in discussions or decisions about monetary policy. We're always going to be focused on the mission that Congress has given us.

"Heading as we are to potentially the worst monthly December performance for USA equity markets since the 1930s, it would be easy to think that we could well be heading for further heavy declines", said Michael Hewson, chief market analyst at CMC Markets. "We at the Fed are absolutely committed to that mission and nothing will deter us from doing what we think is the right thing to do".

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