World stocks fall after Fed suggests Sept rate hike possible
Source: AP
By JOE McDONALD
BEIJING (AP) Global stocks were mostly lower Monday after a U.S. Federal Reserve official suggested a September interest rate hike still was possible and weak Japanese factory activity provided more evidence of a sluggish global economy.
KEEPING SCORE: In early trading, France's CAC-40 fell 1.2 percent to 4,619.91 and Germany's DAX lost 1.3 percent to 10,164.90. Wall Street looked set for losses at the open. Futures for the Dow Jones industrial average and Standard & Poor's 500 were both off 1 percent. On Friday, the Dow lost 0.1 percent and the S&P rose 0.1 percent while the Nasdaq composite gained 0.3 percent.
FED PLANS: The Fed vice chairman, Stanley Fisher said there was a "pretty strong case" for raising rates in September. That ran counter to recent market sentiment that China's economic slowdown and global market volatility might prompt the Fed to wait. Speaking at the U.S. central bank's annual gathering in Jackson Hole, Wyoming, Fisher emphasized he was not saying what action the Fed might take at its September meeting but analysts took his comments to mean he saw the economy moving close to satisfying the Fed's conditions for a hike. It would be the Fed's first reverse from its policy in place since the 2008 crisis of ultra-low rates that have pushed up stock prices.
ANALYST'S TAKE: "The Fed is still at the drawing board with regards to the specifics of the timing of a rate hike this year. But to be sure conviction for a hike this year was not watered down," said Mizuho Bank in a report. "What's more, a rate hike sooner rather than later is preferred on forward-looking inflation."
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Read more: http://bigstory.ap.org/article/93a5e2a4e5094e05b95fca1fa37b13ef/asian-stocks-fall-after-fed-suggests-sept-rate-hike
Demeter
(85,373 posts)The one who funnels orders directly from the TBTF, PTB, bankster-owning 1% Elitists. So even if the majority object, he'll ram it through.
And the American economy will then turn up its toes and die like a dog in the street.
MyNameGoesHere
(7,638 posts)nothing new here.
Yupster
(14,308 posts)Next time the economy turns down the government is going to want to lower interest rates to spur borrowing. You can't do that if you leave them low forever.
No one likes to raise rates, but if you're going to lower them, you have to raise them too.
Way overdue.
MyNameGoesHere
(7,638 posts)but timing is everything. I sometimes if they do it just to see what happens to the economy. Personally I don't like living under a system that is swayed by the whims of a few people.
Yupster
(14,308 posts)We've had years recently where the stock market was up 20 - 30 %. We could have had a couple of 1/4 percent bumps those years.
One problem though is the government debt. If interest rates were to rise 3 % on government bonds, the additional interest cost to the government would be about $ 550 billion per year. We're in a real pickle.
Yavin4
(35,356 posts)So why raise rates?
Raymondo22
(31 posts)Not with China economic jitters.