The Fed Will Be Patient On Future Hikes
The U.S. Federal Reserve held interest rates steady and, in a formal policy shift on Wednesday. They also vowed to be patient in further lifting borrowing costs. This is the clearest signal yet that the tightening cycle it began in 2015 may have ended. Fed Chairman Jerome Powell said the case for raising rates weakened, and announced that the Fed dropped earlier expectations for future tightening.
In addition, the Fed also changed to a different stance over its current shedding of assets. Currently, it is prepared to adjust its plans based on economic and financial developments. The Fed will also likely stop trimming its $4.1 trillion balance sheet. This will leave it with more assets than previously expected.
Oil Prices Rise
Oil prices rose while U.S. government data showed signs of tightening supply. Investors also remained concerned about supply disruptions concerning the new U.S. sanctions on Venezuela’s oil industry. U.S. crude futures had a 1.73% gain to $52.23 a barrel. Brent crude futures gained 0.54% to $61.65 a barrel.
In addition, gasoline inventory rose by almost one million barrels. However, gasoline stocks fell 2.2 million barrels last week. This was against a forecast gain of almost 2M.
McDonald’s Expects Labor Costs
McDonald’s expects earnings per share this year to be plagued by higher labor and restaurant remodeling costs. With their announcement of better than expected profits in the last quarter, the fast food restaurant rose in their stocks. The company also expects the rising dollar to impact overall earnings this year.
U.S. And China Engage In High-Level Trade Talks
The United States and China opened a pivotal round of high-level talks on Wednesday. The talks are aimed at bridging differences over China’s intellectual property and technology transfer practices. They also plan on easing a months-long tariff war. The talks are being led by Chinese Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer.
Currently, the two countries only have a month to resolve the trade conflicts. If they don’t resolve the conflicts by then, the U.S. will impose further tariffs and regulations on China.
AT&T’s Customer Growth Slows
AT&T reported slower wireless customer growth than expected. This caused a 4% drop on their shares. They pulled back on promotional pricing for phone and television plans, sacrificing new customer gains. Currently, they are focused on paying back their debt after buying out Time Warner.