Another factor influencing the Fed's decision is this upcoming election which can cause destabilization across markets. While the market is operating at prices assuming a Clinton victory, there is the potential for an election related disruption. In recent days, Trump has been leading Clinton among likely voters. The Fed might wait before making a decision until after the election.
At the end of the article, the author criticizes the Fed for their actions. He believes that raising the interest is not only a difficult decision, but also an unpopular one. However, their unwillingness to make a decision is hurting our long term economic growth prospects.
http://www.cnbc.com/2016/09/08/3-reasons-a-fed-rate-hike-is-off-the-table-till-2017-commentary.html
I find it interesting that the FED tries to account for the upcoming election in order to attempt to stabilize the market, and in doing so, they are being pulled somewhat into the political facade when making their decision on a rate hike or not. Their expanded policy for normalization should assist in making the decision if they were to look at it alone and not get caught up in the election.
ReplyDeleteI find it interesting that the FED tries to account for the upcoming election in order to attempt to stabilize the market, and in doing so, they are being pulled somewhat into the political facade when making their decision on a rate hike or not. Their expanded policy for normalization should assist in making the decision if they were to look at it alone and not get caught up in the election.
ReplyDeleteEverything surrounding the FED is very interesting because all of their decisions has so much weight on the economy and how we live our every day lives. And to think that politics has this large of an impact as well is intriguing. And with wage growth and job growth not getting better hopefully these political issues can be put aside and our economy gets better sooner rather than later
ReplyDeleteThis article is very interesting because it shows that even if the Fed and the government are separated which would mean that the government should have no influence in things related with the Fed like stating the interest rate, but this shows that they can have an impact in the Fed's decision and that, even if they don't chose what the interest rate is, they can influence it. Also it would be interesting to know if with a situation very similar but without the elections for president so close would be easier for the Fed to increase the rate, and what is the impact for not changing the rate and somehow wait for the elections, and how is this going to affect the economy over the next months.
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