The timing of the Federal Reserve's interest rate hike, which would be its first in nearly a decade, is unclear and for now policymakers must watch that the U.S. economy's surprising recent weakness does not signal a more substantial slowdown, a top Fed official said on Monday.
The euro rose and European shares edged up on Tuesday, responding to signs the euro zone economy is gaining momentum, while a slowdown in factory activity in China kept oil and commodities-linked assets under pressure.
Many of Wall Street's biggest banks are more convinced the Federal Reserve will raise interest rates in June after a strong February jobs report on Friday pointed to sustained economic growth and as the jobless rate hit a more than 6-1/2 year-low.
The Federal Reserve should wait until next year before raising interest rates or risk undermining the very recovery it has helped engineer, a top U.S. central banker said on Wednesday.
Janet Yellen's premium on consensus may lead to a Federal Reserve decision the chair hasn't yet endorsed, as a near majority aligns in favor of a possible June interest rate hike.
U.S. stocks closed higher on Tuesday, with the Dow and S&P 500 hitting records, as investors attempted to interpret a subtle change in emphasis in testimony by Federal Reserve Chair Janet Yellen.
U.S. consumer prices recorded their biggest drop in six years in December and a gauge of underlying inflation was flat, which could make the Federal Reserve more cautious about raising interest rates.