60 seconds with Marcus Brookes on the potential for a December rate rise
Marcus Brookes discusses why he believes the US economy is in good health and a Christmas interest rate rise could be on the cards.
27 October 2015
Is the Fed eyeing a December rate rise?
In September 2015 the Federal Reserve (Fed) took the important decision not to raise interest rates.
But investors had prepared themselves for the rate rise in almost a decade; they thought that if the economy was performing well then interest rates should rise to 0.5% from the 0.25% emergency rate.
What actually happened was the Fed chose not to raise interest rates because of external influences.
Slowing growth in China was one factor that the Fed pointed to in delaying a hike in rates. That introduced a new element of risk, which saw stockmarkets fall, initially at least.
Now, following a period of weakness, markets have started to recover as investors have become more sanguine about the outlook for China.
This is another step towards normalisation of monetary policy. We are fairly sure that the US economy is fine and that would suggest we could get a US interest rate rise in December.
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