Wall St. falls after Fed signals another rate hike this year

US dollar hits eight-week high vs yen as traders wait for Fed signal

The Fed is widely expected to leave interest rates unchanged, although traders will pay close attention to the accompanying statement for clues about the outlook for policy. It said then that higher energy and other costs have the potential to move inflation higher. Second, their plan, if any, on normalising the Fed's enormous balance sheet.

For the Fed, however, it's not as simple as selling off all its assets at once.

The Federal Reserve did not surprise.

Federal Reserve Chair Janet Yellen testifies on Capitol Hill in Washington on July 13, 2017. "The election is a much bigger focus right now as it could have a much greater bearing on the economy over the next couple of quarters", he said.

The Fed's view also prompted rotation into financial shares, which benefit from higher interest rates, from tech shares, he added. The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.

Rather than simply selling the bonds it owns, the Fed will cut the amount of proceeds from bonds that mature it reinvests into other bonds.

Analysts say that incremental nature will help prevent the Fed from knocking the economy off its growth path.

The Fed has telegraphed its move for months, and investors are thought to be prepared for it.

Sept 20 (Reuters) - The S&P and the Dow were little changed on Wednesday but hovered near record levels as investors waited to hear from the Federal Reserve on future interest rate hikes this year while the tech-heavy Nasdaq was pulled lower by a drop in Apple. Now that the economy has recovered enough, the Fed needs to sell a lot of that back.

We expect the FOMC to officially announce. that balance sheet runoff will begin in October. Yesterday's 1News Colmar Brunton poll yesterday showed the National Party rose six points to 46 percent compared to last week's poll while Labour fell seven points to 37 percent.

"Despite the Fed's well-choreographed message today, bond yields are apt to rise if inflation accelerates and if central banks appear to be moving in unison to tighten monetary policy in 2018".

"To me, that is profound to hear from a Fed chair", she told "Closing Bell". The U.S. central bank intends to spend $10 billion less on bonds beginning next month, a figure that will eventually reach $50 billion a month in October 2018.

To stimulate the economy, the Fed bought trillions of dollars worth of bonds and mortgage securities.

The Fed wants the balance-sheet reduction to be as uneventful as possible to Americans on and off Wall Street.

Against the Japanese currency, the US dollar extended gains to fetch 112.57 yen, after earlier climbing to its highest levels since mid-July.

"If there's a time when the market is telling [Yellen], 'Get on with it, ' is it not now?" wrote Michael Block, chief strategist at Rhino Trading Partners, in a note to clients.

Rates on loans have risen faster than rates on deposits because many banks deposits grew quickly after the financial crisis despite low rates, meaning they don't have to quickly hike rates to attract more.