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The Fed's preferred inflation measure nears its 2% target
02 May 2018, 01:20 | Cedric Leonard
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Consumer prices stayed flat in the month of March itself, while consumer prices minus volatile food and energy rose 0.2 percent.
US inflation in March hit the Federal Reserve's 2-percent goal for the first time in a year, indicating inflation pressure building up. Backed by the full faith and credit of the USA government, it is one of the most popular debt instruments in the world. The euro dropped 0.44 percent to $1.2075, not far from its three-month lows last week of $1.2110. However, it does highlight the challenges posed when interest rates start to rise above a certain level.
The yield on the 10-year Treasury note has been rising, and on Wednesday, closed at 3 percent - a barrier that many in the financial markets view as a harbinger of economic and stock market concern.
The so-called core PCE price index - the Federal Reserve's preferred measure of inflation - rose 0.2 month-on-month in March after a similar gain in February.
If inflation does rise above 2 percent on a sustained basis, then the Fed will effectively be missing on both sides of its mandate. It's yield, the rate of return one gets for investing in the note, is used to set interest rates for many forms of consumer and business long-term debt, such as mortgages, vehicle loans and the financing of machinery and equipment. As Caterpillar is often viewed a proxy for the health of the US economy and stock market, the Dow Jones Industrial Average fell 425 points, reflecting concerns of higher borrowing costs for the rest of corporate America. The dollar has surged over 3 percent in the last two weeks.
Consumers resumed spending in March following two months of sluggishness, while their incomes continued to grow, the Commerce Department said Monday.
Inflation is also likely to be fanned by an anticipated pickup in economic growth, driven by a $1.5 trillion tax cut package and increased government spending. The rebound in real consumer spending last month supports expectations that consumption was held back by temporary factors and will gain steam in the second quarter.
When adjusted for inflation, consumer spending increased 0.4 percent in March. The data was included in last Friday's advance first-quarter gross domestic product report.
The department said Friday the US economy grew by 2.3 percent during the first quarter of this year - a slower pace than the previous quarter.
Technology sector results so far - at least from the likes of Amazon, Alphabet, Microsoft, Samsung and SAP - have broadly beaten forecasts for Q1 and the overall aggregate US earnings growth is tracking seven-year highs of nearly 25 percent. There were also increases in purchases of recreational goods.
Elsewhere, the dollar rose versus the Japanese currency, up 0.2 percent to 109.25 yen, having set a 2-1/2 month high of 109.54 yen on Friday.
Capitals even series at 1 after 4-1 win in Game Two
Then there was Tom Wilson! That will make Wilson eligible for Game 3 on Tuesday night, but Dumoulin's status remains uncertain. NOTES: The Capitals have now killed 22 consecutive penalties dating to Game 2 of their first-round series against Columbus.
Running Wild With the Pirates: Tigers 13 Pirates 10
Nova, who forced 13 groundball outs, allowed just six hits, no walks and struck out five in his longest outing since last May. Osuna, recalled from Triple-A Indianapolis, hit a three-run homer in the second and singled and scored in the seventh.