http://www.federalreserve.gov/newsevents/press/monetary/20150917a.htm After all the speculation, read this official release before listening to the analysis by the business media.
Listening to Yellen's ongoing opening statement in the press conference, it seems to me the global economic outlook (especially China, specifically mention) was the primary factor in the no-go decision. The rest of the data -- unemployment and inflation et al -- is a smokescreen. Conspiracy thinking: I wonder if the no-change position was made so as not to upset the Democratic party campaign to retain the White House.
Very little tin-foil hat stuff here.. a quarter or half point change to the rate would have no impact on the presidential race. Also, I think the majority of investors were doubting there was going to be a raise. As far as China and unemployment. I do think China was probably the bigger reasons along with the rest of the world. The USA is doing great, but is not yet at the point where we can shrug off major issues around the world. A raise right now by our fed could be enough to hurt a number of other countries which would come back on us a bit. I have been saying this for years.. the world economy is interconnected more than people realize, and the dollar is more powerful than people realize. Stuff the USA does with the Fed rate, the dollar and our budget is a big deal around the world and should be considered by the Fed. I´ve also been saying that the ONLY reason the Fed should raise rates is if inflation starts creeping in, and because of low oil prices, we can maintain these 8 years of growth without inflation. When oil starts to climb above 80 is when we will start seeing signs of inflation and will need some rate hikes. For now, just the Fed saying they are ´coming´ is enough to keep things in check.
Yeah, it's getting ridiculous. There was even one clown on tv yesterday who used to work for Obama who said they should at least wait until after the end of the year to hike so as not to upset anybody's Christmas! Can you believe it?
I would definitely throw out any conspiracy theory thinking here. If anything it guarantees that we enter an election year with a hike after the now-assumed December cut takes place. And given that it normally takes 6-9 months to filter through to the real economy, the last thing the Democrats would want to see is a slowing economy just ahead of the elections. It is only 0.25%, after all, though it still does give us the direction for monetary policy for months and years to come.
It was some guy whose name escapes me who was on CNBC who was part of the admin at one time. His name and former title escape me, but he was white, wearing glasses and a nice suit, had short brown hair, and seemed to be well-educated. It wasn't Geithner, Goolsby, Carney, or Alxerod. This is interesting: http://www.cnbc.com/2015/09/21/i-wo...ote-to-keep-rates-unchanged-feds-bullard.html
Bullard's views are echoed by other pundits, but I wonder how Yellen and company could spin their September "global economics" statement so quickly as to justify a rate increase a month or three months later after citing China as a component of their decision. Yesterday the offshore yuan was still reported as running amuck (http://www.bloomberg.com/news/artic...st-in-two-weeks-as-central-bank-lowers-fixing). China's economy is faltering (http://www.scmp.com/frontpage/international), per headlines in a Chinese newspaper. Would Yellen and company reverse course and ignore the global economy, looking foolish in doing so? I don't think it is in their makeup to admit their "mistakes" nor would I expect the Fed's benchmarks to improve so quickly. But that's me.
Some will probably call me fringe here, but I have always been in the Ron Paul camp myself. I did not expect anything different. I am still new here so I cant post links yet, which is frustrating, but if you remove the spaces this is a really great read: Http :/ /ww w.ronpaul. com/2015-09-16/the-feds-interest-rate-dilemma-ron-pauls-take/
