If this is true, I think they are putting final nails in the coffin ! It is fun now.
Market turbulence is leading some investors to call on the Federal Reserve to halt its campaign of interest rate increases, but the selloff in stocks and corporate bonds that accelerated Tuesday is unlikely to stop the central bank from raising rates when it meets again next month.
Fed officials have signaled in recent days they plan to proceed with another quarter percentage point increase in their benchmark short-term interest rate when they meet Dec. 19, marking their fourth rate increase this year. The market pullback does underscore however the uncertain outlook for what the Fed will do after that.
Fed officials are divided over how many times the central bank will raise rates next year. Projections released after the Fed’s meeting in September showed officials are roughly equally split over whether the economy will require two, three or four rate rises next year.
Officials will update their projections when they meet in December. Some officials could reduce their estimates for the number of rate increases required next year if the market rout continues, or if their expectations for growth or inflation next year recede.
For the Fed to change its December plan, the market selloff would likely need to signal some broader deterioration in the U.S. outlook. Recent economic data shows few signs of a slowdown outside of the rate-sensitive housing sector. A continued run of strong labor-market data, in particular, would make it difficult for the Fed to justify a pause.
“Interest rates are still very low. We’ve raised them, but they are still at a very low level,” said New York Fed President John Williams on Monday. He reiterated the Fed’s plans to pursue a “gradual path” of rate rises.
Complicating matters for the Fed is the fact that President Donald Trump has been calling on the central bank to halt interest rate increases. Some investors might interpret a central bank decision to stop now as a bend to political pressure, which would hurt the Fed’s inflation-fighting credibility.
Mr. Trump continued his pressure campaign on Tuesday. “I’d like to see the Fed with a lower interest rate,” he told reporters outside the White House. “We have much more of a Fed problem than we have a problem with anyone else.” A Fed spokeswoman declined to comment.
take so long 