Investing.com – Take a peek at the top 5 things that rocked U.S. markets this week.
The Fed Stuck To The Script
In a move largely expected by financial markets, the policymaking Federal Open Market Committee (FOMC) on Wednesday raised its benchmark rate target by 0.25% to 1.25%-1.5%, and maintained its forecast for additional rate hikes in 2018.
The "dot plot," part of the FOMC's Summary of Economic Projections, indicated that the central bank saw rates rising to between 2% and 2.25% by the end of the 2018, despite concerns over inflation.
With rates raised on Wednesday raised to 1.25-5%, that points to three quarter-point rate increases in 2018.
Investor attention, however, shifted to tax reform later in the week as uncertainty over the progress of the bill grew amid reports Republicans were struggling to secure enough votes for the bill’s passage.
Investor uncertainty eased, however, as reports surfaced Friday suggesting Sen. Rubio would support the bill having earlier said he intended to vote against it unless the refundable portion of the child tax credit was increased.
With the tax bill seemingly back on track, risk-on sentiment followed, underpinning a surge in the the dow jones to record highs.
Bitcoin Cash Regained its ‘Third Most Value Cryptocurrency Crown’ From Ripple, Bitcoin Hit Records highs
The launch of CBOE futures trading this week was met with a mixed response as some investors cheered the move as sign that bitcoin is on its way to becoming an established asset class, while others fear the launch of futures contracts – allows bearish bets to be placed on bitcoin – could pressure the price of digital currency.
Bitcoin will once again debut on a Chicago-based futures exchange as the CME group’s launch of bitcoin futures is slated for Dec. 18.
The cryptocurrency limelight this week, however, belonged to Ripple XRP after it rallied more than 80% following reports that banks in Japan and South Korea began tests last week of blockchain technology from U.S. developer Ripple.
Ripple, a digital payments network for real-time financial transactions, promises faster settlements and increased stability.
The rally in Ripple XRP faded on Friday, a day after it had usurped bitcoin cash as the third most value digital currency.
Gold Prices Snapped Three-Week Losing Streak
Gold prices took advantage of dollar weakness to snap a three-week losing streak as tax reform jitters earlier this week stoked demand for safe-haven gold.
The precious metal rallied from the onset of the Federal Reserve interest rate announcement, which some say was expected as markets have priced the rate hike for months.
Gold prices rose 0.10% to $1,258.40 on Friday.
Oil Pipeline Shutdown Supported Surge in Oil Prices
Oil eked a weekly win to snap a three-weak losing streak, shrugging off bearish reports form OPEC and the International Energy Agency (IEA), forecasting non-OPEC output, led by the US, to grow faster than expected.
The IEA in its monthly oil market report, published on Thursday, revised upward its projection for US oil production, warning that total supply growth could exceed demand growth in the months ahead.
OPEC forecasts non-OPEC supply growth to rise by 120,000 barrels per day (bpd) to 990,000 bpd. US oil supply is expected to grow by 1.1 million bpd in 2018, an upward revision of 180,000 barrels, according to the report.
The ongoing Forties pipeline shutdown earlier this week was one of the catalysts driving oil prices higher, as market participants expect flows to remain shut for weeks, tightening supplies.
Crude futures for February delivery rose 26 cents to settle at $57.30.
Sterling Slumped as Brexit Negotiations Enter Phase II
The pound fell sharply against the greenback on Friday as investors braced for the next round of Brexit negotiations, which European Commission president Jean-Claude Juncker warned would be "harder".
The progress in brexit talks comes a week after the UK agreed to pay up to €50 billion to settle the so-called divorce bill to negotiation its exit from European Union.
GBP/USD rose 0.80% to $1.3324.