"Most FOMC participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter"
- Federal Reserve Chair Janet Yellen
The number of Americans seeking unemployment benefits rose slightly in the week to September 19, but remains consistent with a labour market that is steadily adding jobs. Initial jobless claims across the US advanced by 3,000 to a seasonally adjusted 267,000 in the reported period, while markets expected an increase to 272,000 claims. Meanwhile, another bunch of data from the US revealed that factories in the world's largest economy saw the first decline in orders for durable goods in three months. Orders for big-ticket items fell 2% in August, following the downwardly revised gain of 1.9% in the prior month. Bookings for core capital goods edged 0.2% lower on a monthly basis in August, missing the estimate for 0.4% rise.
Meanwhile, Chairwoman of the Federal Reserve Janet Yellen spoke yesterday in Massachusetts. She admitted that the majority of FOMC members are favouring an increase of the Federal Funds rate this year. However, any unexpected economic events may change that plan, she added. In addition to that, Yellen underlined that recent financial and economic developments, especially in China, might damp outlook for economic recovery and inflation. It was the main reason, why the Fed left rates on hold a week ago.
© Dukascopy Bank SA