Fed officials express caution about pace of future hikes

US Fed chairman hints at higher rates following Trump attack

Dollar weakens as cautious Fed leads to rate-hike rethink

Mr. Powell didn't provide any more guidance on the likely path for rates, and he noted they remain low by historical standards.

The minutes said that such a change would help to convey "the Committee's flexible approach in responding to changing economic circumstances", while market supposed that this could indicate possible changes for the Fed's rate hike decisions in 2019.

On Tuesday, Trump tweeted that he was "not even a little bit happy" with Powell.

In the meantime, the stock market is breathing easier, now that the Fed doesn't have as far to go on its rate-raising program as earlier feared. For the stock market, he emphasised that current valuations are broadly in line with the long term levels and do not see "dangerous excesses" in equities.

"We know that things often turn out to be quite different from even the most careful forecasts", Powell said at an Economic Club of NY luncheon on Wednesday.

Speaking to the Economic Club of New York Powell said interest rates were now "just below" the range Fed officials consider neutral, a setting created to neither speed nor slow growth. On Wednesday he referenced a range, and in October he likely referenced a median.

Technology shares weighed the most on all three major USA stock indexes, with the S&P 500 technology sector down 0.95 percent.

The hikes have prompted a flood of criticism from President Donald Trump, who has repeatedly attacked the Fed and Powell personally.

It was a "rookie mistake, " Omair Sharif, senior US economist at Societe Generale, said Wednesday in a note to clients.

Federal Reserve officials are seemingly on track to raise a key interest rate in December, but they showed more caution in their most recent meeting and indicated the pace of future hikes might need to slow given emerging risks to the economy.

The fed fund futures contract expiring in January 2020, a heavily traded contract that reflects market expectations for where rates will be at the end of 2019, rallied sharply on record volume and pointed to an implied yield of 2.70 percent.

Essentially, it means rates are close to where he wants them to be, and investors are expecting fewer rate hikes to derail the bull market. Salesforce.com surged 10.3 per cent. The law creating the Fed says its officials and those of other independent agencies can be "removed for cause" by a president. This is probably because Fed Chair Jerome Powell stole most of the thunder the day before with his dovish remarks about the fate of future rate hikes.

Neither Clarida nor Powell said definitively whether rate hikes should stop at neutral, and each stressed that level was very hard to estimate.

The rate increases have gradually raised borrowing costs for consumers and businesses.

"Powell said nothing to suggest that he or the majority of the FOMC think they'll be able to stop at the bottom of the range, after just one more hike", said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Paul Ashworth, chief USA economist at Capital Economics, said he expects two rate hikes in 2019, not the three the Fed has been projecting for next year.

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