Business News

CCTV Script 12/12/16

This is the script of CNBC's news report for China's CCTV on December 12, Monday.

Welcome to CNBC Business Daily, I'm Qian Chen.

The Federal Reserve Open Market Committee on Wednesday is expected to announce an interest rate hike - its second in a year.

It's also the second in 10 years, for that matter.

Some of the more hawkish Fed officials could view the Fed as behind the curve, and that could show up in the minutes of the meeting.

The unemployment rate at 4.6 percent "might raise some eyebrows" among Fed officials, as it could be taken as a signal that the Fed has let the labor market improve too much without moving rates.

Meanwhile, inflation data shows improvement as well.

Core CPI for October increased by 2.1% - showing inflation ticking up in the US. However this is not the inflation data that Fed's been watching closely.

The core PCE - increased by 1.7% - is the key. It has not reached Fed's 2% tagret, but is getting closer and closer.

Analysts said the Fed moving to hike rates as the economy improves would be taken as things "returning to normal" after the extraordinary easing of the post-financial crisis years.

[JOE MAGYER, Lakehouse Capital Chief Investment Officer] "The US economy is going very well. Its not doing incredibly or magical era but 4.6% unemployment that's strong. Rates should not be where they are today and I totally agree that they should be increase."

However, the 25 basis point increase in the Fed funds target rate has become somewhat anticlimactic, not just because it's been so long anticipated but because there's a new game in town for investors.

In the week ahead, the Fed will hike rates after its two-day meeting, and the markets, not always happy with rate hikes, are set to take this one in stride. The real gift investors are waiting for and have been positioning for is the promise of individual and business tax cuts and an aggressive fiscal stimulus package from the incoming Trump.

Fed Chair Janet Yellen will meet with the press after the Fed's 2 p.m. announcement Wednesday.

Investors will be listening for her thoughts on how the economic agenda of the new administration could impact the economy and alter the course of interest rates.

CNBC Qian Chen, reporting from Singapore.

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