Thursday, 17 September 2015

Samurai Summary: Top Tweets 17/09/2015

The day has finally arrived, the Federal Open Market Committee conclusive announcement of whether interest rates in the US will begin their ascent or put on hold. The decision is the most critical as rates have been artificially low for years in an effort to save the US economy from collapse.  As far as the decision comes , it looks like there are a number of members who could sway this vote to a nail biting finish.

What makes the decision so tough is that most economic data points that policymakers uses to gauge the level of economic activity and assess if it's meet the Fed's economic objectives are nearing if not within a whisker of their targets. The tricky part comes in where the countdown to the months to the first hike slims down with every passing week.


The biggest risk at the moment is the global market volatility seen over the past month stemming from the financial turmoil in China. This is the biggest argument against a rate hike for the Fed as they don't want to apply pressure on markets by introducing a rate hike that would create expectations for the next.

However if they don't hike rates the uncertainty of the hike increases which in turn increases more volatility. You can see how this will be a very difficult meeting for Fed officials and it's my belief that the devil will be in the detail. So the likely action would be for the Fed to put things on hold however the market will take it's lead from the tone and sternness in Fed President Janet Yellen's speech.
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