Banks, lenders and other financial companies rose as traders hedged their bets on the outlook for interest rates. Consumer prices were flat in June from the prior month and annual inflation remained well below the Federal Reserve's 2% target, throwing into further doubt the Fed's rate plans for the balance of the year. Bank shares ran up for much of the last 12 months on expectations that the Fed would hike rates according to its publicly disclosed schedule, but prices on rate-prediction markets in recent weeks have indicated skepticism over whether the central bank will proceed with plans given the weakness in inflation data. The odds of a hike in September have shrunk to about 1%, but buyers of bank shares may be looking out to the next central-bank meeting. Also buoying banks, the Office of the Comptroller of the Currency reportedly took the first step toward changing the Volcker rule trading ban, The Wall Street Journal reported, as it prepares potential changes to the rule's definition of proprietary trading and other key elements.
-Rob Curran, email@example.com
Continue Reading Below
(END) Dow Jones Newswires
August 01, 2017 16:26 ET (20:26 GMT)