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US Stocks Hit Record Highs

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Editor’s Remarks:
Wall Street stocks have raced to yet another record as comments from the top of the Federal Reserve sent traders into a frenzy over growing expectations that US interest rates could go up as soon as this month, with the Dow Jones hitting 21,000. Whilst Fed chair Janet Yellen’s last major speech hinted at interest rates staying low until later in the year, strong US economic performance has prompted her colleagues to see the upcoming March meeting as a turning point in Trump era monetary policy. After influential New York Fed President William Dudley’s comments that the case for tightening rates had become “a lot more compelling” added to similar remarks from the Dallas and San Francisco Fed presidents, markets are now pricing the chance of a March rate rise at 82%, up from 36% a week ago. On the other hand, if the unexpected falls in January’s construction and consumer spending and the largest monthly increase in inflation in four years spiral into a more pessimistic outlook for US growth, there is a chance that its central bankers may end up taking a turn back towards caution.

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