Fed hails ‘solid’ US growth as economy defies hurricanes 

Interest rates are set to rise again next month as Janet Yellen and her colleagues at the Federal Reserve said the US economy is growing at a “solid” pace despite hurricanes Harvey and Irene.
“The labor market has continued to strengthen and that economic activity has been rising at a solid rate despite hurricane-related disruptions,” the Federal Open Markets Committee said, in a more upbeat assessment of the economy’s position.
It listed growing household spending and business investment as additional indicators of economic strength, and noted elements of inflation remain “soft”.
Fed hails ‘solid’ US growth as economy defies hurricanes 

Hurricane Harvey struck the US in September and flooded Houston, Texas, but it failed to dent the economic recovery

The Fed is in the midst of a programme to raise interest rates and reduce the stock of bonds bought under its quantitative easing programmes.
Ms Yellen held rates flat at this meeting, but analysts including Luke Bartholomew at Aberdeen Standard Investments believe another hike next month is almost certain.
“The path is now clear for a December hike.  There was a very slim chance that something today could shake the market’s expectation of a hike in December,” he said.
“But Fed communication has been clear and, barring any big shocks, financial markets should have a pretty smooth run into the December hike. The focus now for investors is who the new Chair of the Fed will be and the success or otherwise of tax reform.”
Ms Yellen has chaired the Fed since 2014 and has received mixed praise from Donald Trump.
On Wednesday he described her as “excellent”, while also indicating he intends to replace her next year.
She is not currently thought to be likely to be reappointed next year, particularly as she said post-crisis bank regulations should be kept in force, something the President opposes.
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