Published: Thu, February 23, 2017
Economy | By Melissa Porter

U.S. dollar climbs amid Fed officials' remarks

U.S. dollar climbs amid Fed officials' remarks

U.S. futures pointed to a muted open on Wall Street, with investors likely to pause for breath following fresh record closes in the previous session and ahead of the minutes from the latest Federal Reserve meeting.

1 meeting, the Fed left the benchmark interest rates unchanged.

"I don't see anything in the minutes that changed that narrative", Todd said.

They still expect to only need gradual rate increases if the economy continues to grow at a moderate pace, according to the minutes of the January 31-February 1 monetary policy meeting. The FOMC meets again in March. 1 gathering showed Fed officials wrestling with uncertainty on issues ranging from the Trump administration's fiscal stimulus plans to the headwinds a rising dollar may pose.

Fed policymakers said such a step could be necessary if the advances of the labor market and inflation were "in line with or stronger than their current expectations" or if risks heightened of a falling unemployment rate that pushed inflation above the Fed's 2% annual target.

A few officials noted that it might be appropriate to move "potentially at an upcoming meeting", which would allow the central bank greater flexibility in responding to changes in economy.

Recent comments by Yellen and other Fed officials appear to suggest the Fed could raise rates at its March meeting, but the "market is not there", said Walter Todd, chief investment officer with Greenwood Capital in Greenwood, South Carolina.

Those expectations and the prospect of increased government spending have also has helped boost stock prices.

The minutes indicated their forecasts were little changed since the end of previous year, and in their discussion of risks and uncertainties, they said "some time would likely be required for the outlook to become clearer".

The Fed's preferred inflation measure remains slightly below 2% but has been rising steadily. But some also perceived risks of slower growth from some of Trump's proposals, presumably restrictions on trade.

Brent crude traded at around $56.40 per barrel on Wednesday, down 0.46%, while USA crude was around $54.05 a barrel, down 0.52%.

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