Whoa, not so fast, St. Louis Fed President advised today on CNBC. Last week’s decision by the Federal Reserve to hold off on raising interest rates for the first time in nine years was widely perceived as a warning that the US economy is weakening and so tighter monetary policy isn’t on the near-term horizon. But Jim Bullard wants the crowd to dial down the revival in dovish sentiment and consider the finer points of the hawkish perspective. “There’s a powerful case to be made that it’s time to normalize interest rates,” he insists.
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Last week’s no-hike Fed decision raises questions about the outlook for the US economy, but another delay in tightening monetary policy revived demand for interest-rate sensitive assets. US real estate investment trusts (REITs) gained more than 3% for the week through Sep. 18, based on the total return for the Vanguard REIT ETF (VNQ). That’s the best weekly performance by far for the week just passed among our standard set of proxies for monitoring an the major asset classes.
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● No-hike Fed decision raises pressure for new ECB stimulus effort | Bloomberg
● Asian stocks fall on global growth concerns, but China bucks the trend | RTT
● Oil prices up on news of lower US drilling activity | Reuters
● German economy ministry expects moderate growth in Q3 | MNI