Monday 12 September 2016

Cooling US economy keeps lid on Fed rate hike expectations

Markets fell sharply on Friday on concerns that the Federal Reserve may be about to raise interest rates.

However, Jeffry Bartash at MarketWatch reminds us that economic growth in the United States has not been great.

“A slew of evidence suggests that key segments of the economy such as energy and manufacturing are still struggling and that even some of the strongest sectors of growth have taken a step back,” Bartash wrote over the weekend.

“There are already growing signs the U.S. economy may be cooling down in August into September,” Scott Anderson, chief economist of Bank of the West, was quoted as saying.

“Middling economic growth and low inflation don’t seem like a sign for the Federal Reserve to raise interest rates. And most investors aren’t expecting one when the central bank meets in mid-September,” Bartash concluded.

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