Trade Deficit Declines on Oil Imports - The Commerce Department reported that the trade deficit declined in August to $30.7 billion on a drop in crude oil imports. Imports declined to $158.9 billion in August which was a $913 million (0.6%) drop from July. Exports climbed to $128.2 billion which was an increase of $228 million (0.2%). Exports were led by autos, metals and soybeans. Exports of capital goods fell to the lowest level in four years. Imports and exports were boosted by increased trade in autos and auto parts.
Bernanke Comments on Monetary Policy - Interest-rate futures on Friday indicated traders raised bets that the Federal Reserve will raise its target overnight borrowing cost for banks, known as the federal funds rate, by next spring after central bank Chairman Ben Bernanke said officials will tighten monetary policy "when the economic outlook improves sufficiently." The March fed funds contract indicated traders expect rates to rise to 0.33% by then, from the current range of zero to a quarter of a percent. Futures for April show traders expect the benchmark rate to be about 0.39% by then. A week ago, the March contract indicated no rate hike by then and April futures priced in rates of 0.32%. Analysts say raising the fed funds rate will come long after the Fed pursues other methods to remove liquidity from the financial system, with many not forecasting rate increases until later in 2010.
Gold Drops, Dollar and Oil Rise on Bernanke's Comments - Gold futures fell after reaching new record highs in the previous session after Federal Chairman Bernanke said loose monetary policy will end eventually. Gold was down 0.6% to $1,048.90 an ounce. Meanwhile, Bernanke's comments strengthened the dollar which boosted oil futures as it perceived them as meaning that the outlook is brightening for the economy both domestically and globally.
Bernanke Comments on Monetary Policy - Interest-rate futures on Friday indicated traders raised bets that the Federal Reserve will raise its target overnight borrowing cost for banks, known as the federal funds rate, by next spring after central bank Chairman Ben Bernanke said officials will tighten monetary policy "when the economic outlook improves sufficiently." The March fed funds contract indicated traders expect rates to rise to 0.33% by then, from the current range of zero to a quarter of a percent. Futures for April show traders expect the benchmark rate to be about 0.39% by then. A week ago, the March contract indicated no rate hike by then and April futures priced in rates of 0.32%. Analysts say raising the fed funds rate will come long after the Fed pursues other methods to remove liquidity from the financial system, with many not forecasting rate increases until later in 2010.
Gold Drops, Dollar and Oil Rise on Bernanke's Comments - Gold futures fell after reaching new record highs in the previous session after Federal Chairman Bernanke said loose monetary policy will end eventually. Gold was down 0.6% to $1,048.90 an ounce. Meanwhile, Bernanke's comments strengthened the dollar which boosted oil futures as it perceived them as meaning that the outlook is brightening for the economy both domestically and globally.
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