Thursday, 21 March 2019

Fed signals no further rate hikes in 2019 as others fear recession and credit bubble

Most markets fell on Wednesday.

The S&P 500 fell 0.3 percent and the STOXX Europe 600 fell 0.9 percent.

In Asia, the Nikkei 225 rose 0.2 percent but the MSCI Asia ex-Japan index fell 0.1 percent.

The Federal Reserve ended its monetary policy by leaving interest rates unchanged and indicated no further rate hikes this year.

Indeed, US business leaders are turning downbeat on prospects.

Last week, research firm Gartner suggested that top US business leaders are “bracing for a recession” based on its study of all the recent fourth-quarter corporate results announcements.

On Wednesday, top US CEOs in the Business Roundtable reported that their economic outlook weakened in the first three months of the year.

John Mauldin warned that if the US falls into a recession, a credit bubble will explode.

Still, despite a sharp decline, the Business Roundtable's economic outlook index for the January-March quarter remained far above its historical average.

And Oxford Economics suggested in a Wednesday note that “2018's bad news...have reversed in the Q1 2019” and that “the worst is behind us”.

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