Futures flat after Fed sees faster pace of rate hikes

[December 15, 2016]  By Tanya Agrawal

(Reuters) - U.S. stock index futures were little changed on Thursday, a day after the Federal Reserve increased interest rates for the first time this year and signaled a faster pace of hikes in 2017.

* The Fed sees three rate hikes in 2017 instead of the two foreseen as of September, partly as a result of the changes anticipated under President-elect Donald Trump.

* Fed Chair Janet Yellen also cited an improving labor market and evidence of faster inflation for its 2017 rate outlook.

* The Fed's decision to raise rates comes as Trump, who will be sworn in next month, is expected to cut taxes and boost spending on infrastructure.

* Since the Nov. 8 U.S. presidential election, stocks have rallied on bets that Trump's expected business friendly policies will stimulate the economy.

* The Dow is about 1 percent away from hitting the 20,000 mark and the S&P has risen 5.3 percent since the election.

* U.S. stocks fell the most in two months on Wednesday after the central bank's hawkish stance took some investors by surprise and crude oil tumbled.

* Oil prices recovered on Thursday as investors anticipated a tighter market in 2017 due to planned output cuts led by OPEC and Russia. [O/R]

* The interest rate hike sent the dollar index <.DXY> to a 14-year high, while gold hit <XAU=> its lowest since early February.

* A host of economic data scheduled to be released today includes a report from the U.S. Labor Department, which is expected to show that the consumer price index rose 0.2 percent in November after a 0.4 percent gain in October. The data is expected at 8:30 a.m. ET (1330 GMT).

* Weekly report on jobless claims is likely to show that number of Americans filing for unemployment benefits fell 3,000 to a seasonally adjusted 255,000 for the week ending Dec. 10.

Traders works on the floor of the New York Stock Exchange (NYSE) as a television screen displays coverage of U.S. Federal Reserve Chairman Janet Yellen shortly after the announcement that the U.S. Federal Reserve will hike interest rates, in New York, U.S., December 14, 2016. REUTERS/Lucas Jackson

* Mondelez  was up 4.7 percent at $44.85 in premarket trading after reports that Kraft Heinz may buy the Cadbury chocolate maker. Kraft was up 0.8 percent at $85.05.

* Yahoo fell 3.6 percent to $39.44 after the largest security breach in history. The company said data from more than 1 billion accounts was compromised in August 2013.

Futures snapshot at 7:03 a.m. ET:

* Dow e-minis  were up 18 points, or 0.09 percent, with 5,608 contracts changing hands.

* S&P 500 e-minis  were down 0.25 points, or 0.01 percent, with 70,152 contracts traded.

* Nasdaq 100 e-minis were down 3 points, or 0.06 percent, on volume of 3,285 contracts.

(Reporting by Tanya Agrawal in Bengaluru; Editing by Anil D'Silva)

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