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Data brings more focus on timing of U.S. rate hike

U.S. stock investors may be bracing for further signs next week that the Federal Reserve could increase interest rates sooner rather than later, with retail sales expected to rebound after two straight months of declines. A pickup in retail sales could show consumers are benefiting from sharply lower oil prices, but analysts say spending in February was likely curbed by unusually harsh weather in parts of the United States. Among them, Richmond Federal Reserve President Jeffrey Lacker repeated his view that the Fed should raise rates in June.

Fed upbeat on U.S. economy, cites strong job gains

By Michael Flaherty and Howard Schneider WASHINGTON (Reuters) – The Federal Reserve on Wednesday said the U.S. economy was expanding “at a solid pace” with strong job gains in a signal that the central bank remains on track with its plans to raise interest rates this year. The Fed repeated it would be “patient” in deciding when to raise benchmark borrowing costs from zero, though it also acknowledged a decline in certain inflation measures. After a two-day meeting of the Federal Open Market Committee, policymakers struck an upbeat tone on the U.S. economy's prospects and held to their view that energy-led weakness in inflation would dissipate. “The committee, in fact, was downright bullish on current economic conditions and the outlook,” said Paul Edelstein, director of financial economics at IHS Global Insight.

Asia shares sluggish, bond yields climb into US data

By Wayne Cole SYDNEY (Reuters) – Asian shares spent much of Friday in a state of suspended animation as tension mounted ahead of jobs data that could make or break the case for an imminent scaling back in U.S. stimulus. Government borrowing costs from Japan to Australia hit fresh highs on trepidation the Federal Reserve could start tapering its $85 billion of monthly debt purchases at its policy meeting on December 17 and 18.

U.S. consumer spending gauge rises in September, wholesale inflation muted

By Lucia Mutikani WASHINGTON (Reuters) – A gauge of U.S. consumer spending rose in September as Americans likely snapped up Apple's new iPhone and bought leisure goods, but falling sales of automobiles pointed to sluggish economic growth during the third quarter. Other data on Tuesday showed lackluster demand was keeping inflation muted, with wholesale prices unexpectedly falling last month. That should provide the Federal Reserve with ammunition to maintain monthly bond purchases for a while as it tries to nurse the economy back to health. …

U.S. stocks needn’t fret about a government shutdown

By Rodrigo Campos NEW YORK (Reuters) – Investors may be tempted to shy away from stocks in the next week or two as the latest version of the fiscal follies plays out in Washington. It's understandable. The prospect of a government shutdown or, worse, default on the federal debt, rekindles memories of 2011 when Washington's infighting prompted the loss of the United States' triple-A credit rating and was a primary driver behind the stock market's last full-on correction. …