November 18, 2015

When Tightening Leads to Easing

US Fed likely to tighten before year end ... The US Federal Reserve is on track to raise rates before year end, with a pick-up in economic activity and positive dialogue emerging from the central bank – Investor Daily

Dominant Social Theme: The economy is booming. Hike, hike, hike. It's all we can do.

Free-market Analysis: The tightening talk is picking up. Principal Global Investors manages some US$350 billion, much of it in retirement plans, and its officials "now assess the likelihood of a December rate rise at 54 per cent," according to Investor Daily. A March rise is assessed at 71 per cent.

Principal Global Investors global chief economist Robert Baur believes US economic data now justifies a rate rise, we learn. US Federal Reserve Officials had contemplated a hike but Chinese market instability forced a hiatus.

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