Global central bankers are meeting this week at the Federal Reserve’s annual retreat to discuss the most recent market woes and the potential up-coming interest rate hike that stemmed the Fed’s response to the 2008 Financial Crisis.
In the last several weeks, the Fed had been signaling that they were going to raise interest rates around September warranting that the U.S. economy was strong enough, despite much resistance. Among all the recent reports of low unemployment and increased consumer confidence in home purchases it may have appeared that the economy was strong. Unfortunately, China’s market turmoil and other factors brought U.S. markets into correction territory. In addition, according to the article, a recent study suggests that corporate bonds outstanding in emerging markets have increased to $6.8 trillion since 2008. …show more content…
One reason being that the recent market turmoil has weakened our economy and the economies of many other countries. Raising interest rates now would severely decrease borrowing, which stimulates growth in the economy, among consumers and foreign countries. Also, raising interest rates can also appreciate the value of the dollar which would make that $6.8 trillion in corporate much harder to pay off. Although rates should be controlled by the market—not by a single authority—the Fed should wait a few more months before raising interest rates. Once they do, they should leave it
In the last several weeks, the Fed had been signaling that they were going to raise interest rates around September warranting that the U.S. economy was strong enough, despite much resistance. Among all the recent reports of low unemployment and increased consumer confidence in home purchases it may have appeared that the economy was strong. Unfortunately, China’s market turmoil and other factors brought U.S. markets into correction territory. In addition, according to the article, a recent study suggests that corporate bonds outstanding in emerging markets have increased to $6.8 trillion since 2008. …show more content…
One reason being that the recent market turmoil has weakened our economy and the economies of many other countries. Raising interest rates now would severely decrease borrowing, which stimulates growth in the economy, among consumers and foreign countries. Also, raising interest rates can also appreciate the value of the dollar which would make that $6.8 trillion in corporate much harder to pay off. Although rates should be controlled by the market—not by a single authority—the Fed should wait a few more months before raising interest rates. Once they do, they should leave it