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Oil prices surged on Wednesday after the Federal Reserve said it will likely raise interest rates at some point this year by removing a reference of staying patient from its minutes. While Federal Reserve chair Janet Yellen indicated that its benchmark Federal Funds Rate could be increased later this year, it will not occur until after the Federal Open Market Committee’s next meeting in April, at the earliest. Yellen added that the timing of the decision will be “data dependent,” and that a rate hike will not necessarily be made in June. Meanwhile, the U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 9.6 million barrels in the week ended March 13, compared to expectations for an increase of 3.8 million barrels.
GOLD
Gold held higher on Wednesday after the Federal Reserve's highly-anticipated policy statement. The Federal Reserve opened the door to an interest-rate increase as soon as June, also indicating it will go slow once it gets started. The new signals were contained in a policy statement that ended an era by dropping an assurance that the Fed will be “patient” in raising rates, and in a fresh set of estimates that lowered the median for the federal funds rate the end of 2015 to 0.625 percent compared with 1.125 percent in December. The Federal Open Market Committee said it will be appropriate to tighten when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term. An increase in the target range for the federal funds rate remains unlikely at the April meeting, she added in the statement.
