The Fed Kicks the Can Down the Road

Long read: The dawdling isn't helping business confidence or the U.S. stock market.  

Robert Johnson, CFA 21.09.2015 | 11:35

For all the Fed buildup, markets ended up not doing much for the week as a whole. Equity markets generally did well in the middle of the week on hopes that the Fed would leave rates unchanged. However, markets decided that wasn't such a good thing after all, with rate uncertainty likely to persist, maybe through the end of the year.

The oral comments and changes in Fed economic forecasting were not terribly reassuring relative to the underlying strength of the U.S. economy outside of the consumer. Additionally, the Fed still seemed intent on raising rates in 2015 despite standing firm for now, as indicated by the Fed Governors Fed Funds Projections.

The Fed's own tone of uncertainty and fear of acting decisively certainly isn't a positive for businesses or investor confidence, either. More than anything else, markets hate uncertainty.

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Om forfatteren

Robert Johnson, CFA  Robert Johnson, CFA, is director of economic analysis with Morningstar.

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