Interest Rate Hike Watch

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The second largest economy in the world is showing more signs of faltering.

Per Seeking Alpha:

Global stocks are mixed today as reports from China set a negative early tone off of disappointing economic reads. The Shanghai Composite Index fell 2.7% and the Nikkei lost 1.6%. Hong Kong’s Hang Seng was down 0.3%, while the broad market in Australia ended with a mild gain. There’s growing concern China will miss its economic growth target of 7% for the full year based off of new data. European stock markets are broadly higher in early trading. The focus will shift to the U.S. in the middle of the week when the Federal Reserve meets. A recent survey of economists indicated a majority of economists think the Fed will hold rates steady, although the decision is still considered a “toss-up” by many.

Another interesting note made by the Wall Street Journal is the rate increase and subsequent pull back of more than a dozen world banks.  Article here.

Interest Rate Increase and Pull-backs

Is it worth increasing the rate prematurely to only have to lower it in the future?  This may lead to large price swings and volatility in the market.  Further, it would put in question the validity of the FEDs actions and efficacy.  Time will tell.

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