Markets & Economy

Why a September Fed rate hike would be risky

Between the election and international economies, it'd be better to stay put
  • Employment and manufacturing reports are stalled or falling.
  • The global trade war is going from simmer to slow-rolling boil.

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Big economic reports on the Friday before a long holiday weekend can produce epic violence in the bond market, but not last week. Long-term rates are entering a third-straight month in the same narrow trench, the 10-year T-note 1.50 percent-1.60 percent, mortgages still close to 3.50 percent. The all-important employment report for August was non-accelerating, even on the slow side. The manufacturing ISM (Institute of Supply Management) survey tanked three points from July and August forecast to negative-growth 49.1, and auto sales dropped from peak despite give-away incentives. A Fed rate hike on September 21 would be riskier than staying put. In one swell foop, tie that risk to the U.S. election and conditions overseas.... Elections and free-trade agreements Our election is peculiar for many reasons, but the most odd and powerful is this: High heat from damaging aspects of globalization and trade have driven both parties to agreement. Republican free-traders have j...