Fed change of language raises rate worries

IT was a weak session for the local market on Thursday, even as the Straits Times Index slipped only 0.10 point to 3,419.05, as sentiment was cautious in response to a Wednesday plunge on Wall Street that came after the US Federal Reserve released a hawkish statement following its Federal Open Market Committee meeting.

Volume here was 1.25 billion units worth S$1.19 billion and, excluding warrants, the advance-decline score was 196-265.

On Wednesday, the Fed omitted the phrase "for a considerable time" with reference to the period it could afford to wait before it starts to raise interest rates. In addition, language used to describe the economy was more hawkish than before - job gains went from "solid" to "strong" and economic activity went from "moderate" to "solid".