In an interview Thursday following the Federal Open Market Committee’s two-day meeting, Bob Doll of Nuveen Asset Management and Anika Khan of Wells Fargo Securities discussed the heightened focus from the Federal Reserve on global market factors.
Stock markets around the world lost ground Friday as investors appeared to struggle with concerns voiced yesterday by the U.S. Federal Reserve about the global economy.
However, she said the Fed’s concern should not be overstated.
“It was a close call in my mind, in part reflecting the conflicting signals we’re getting”, Mr Williams said of last week’s decision.
The economy is near full employment, and inflation will nearly certainly rise, Bullard said, leaving the Fed’s near seven-year stay at near zero rates out of line with the broad economic picture.
The central bank’s decision, and the way its deliberations were framed, were interpreted by many Fed watchers as a sign that the central bank might not raise rates this year. Analysts are expecting the report to show the total number of cattle in feed yards to be 3.4 percent higher this year than last. However, recent comments from Fed officials has traders feeling more confident that a rate hike will be announced before the end of the year and perhaps as soon as October. He said Saturday that the Fed’s failure to tighten had raised the risk of “adverse outcomes”. South African government bonds echoed the rand as yields in the USA climbed, with the heavily-traded paper due in 2026 adding 3.5 basis points to 8.370 percent.
The Fed kept interest rates unchanged last week in a bow to worries about the global economy, financial market volatility and sluggish inflation at home.
Chairwoman Janet Yellen, in a post-FOMC press conference on Thursday to explain the decision, cited financial market turmoil and slowing growth in China as raising doubts about the outlook for USA growth and inflation. But with <strong>interest ratesstrong> still close to zero speculation on gold offers a secure investment and a strong upside potential.
Just as in the second half of 2013, the risk is that the economy will advance soundly and the jobless rate will be “at or below five per cent“, he said. The best forecast for future inflation, they found, has historically been the Fed’s target of 2 percent.
“It might not be definitive”, said Scott Anderson, chief economist at Bank of the West. “We might have another nail-biter come the December meeting”.