Mortgage Rates Hit New 4-Year Highs

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Officials at the US Federal Reserve have hinted at gradual hikes in interest rates this year. Some members upgraded their forecasts.

Officials have penciled in three hikes in 2018, according to their median projection released last December. Consumer confidence has returned to pre-crisis levels.

"I see a real challenge for the Fed, not because they're not capable, but this fiscal stimulus coming now made a hard job even harder", said Seth Carpenter, chief USA economist at UBS and a former Fed and Treasury official. Free two- and four-week trial offers have been extended to InvestorPlace readers. The minutes showed bullish sentiment among policymakers, confirming their intention to raise interest rates this year.

Markets were paying close attention for any hints that policy will be different under new Fed Chair Jerome Powell, who replaced Janet Yellen at the behest of President Donald Trump.

This as the Fed minutes noted that a majority saw stronger growth lifting liking of further rate hikes.

"We've got a lot of Fed speakers.this week".

The Fed has also been unloading trillions of dollars of assets that it purchased to lift the economy after the financial crisis a decade ago.

The Fed minutes, due to be released at 1900 GMT, are likely to exert the most influence on gold prices today. The euro was flat at $1.2337 following losses of 0.55 percent the previous day.

Most Asian equity benchmarks declined with U.S. futures and the dollar rose as Treasury yields climbed back toward recent four-year highs.

Stocks reversed gains and bond yields rose after the minutes revealed a more hawkish posture among Fed officials.

"With a strong labor market and likely only temporary softness in inflation, I view it as appropriate that monetary policy should continue to be gradually normalized", he said.

At the January meeting, "almost all" Fed members - more than previously - said they expect inflation to hit the bank's 2% target over the medium term, bolstering the case for future rate rises. Fed staff projected they expect to meet that goal by 2020. While headline growth stepped back a bit in the fourth quarter, largely on account of increased drag from higher imports and lower inventories, underlying final private domestic demand-which is a better indicator of economic momentum-grew at its fastest pace in more than three years.

"Firms may be only just beginning to determine how they might allocate their tax savings among investment, worker compensation, mergers and acquisitions, returns to shareholders, or other uses", according to the minutes.

Ken Matheny, executive director for United States economics at Macroeconomic Advisers by IHS Markit, said the discussion was "consistent" with predictions of several rate rises in 2018.

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