Economists continue to see the Federal Reserve holding rates steady next week, though the jury’s still out on a potential November increase.
“It’s a very narrow window to achieve that soft landing,” Summers told Bloomberg “There is no sign” at this point that this is a “2 per cent inflation economy”, he said, adding that “the Fed is right to be data dependent” in setting its policy. “People need to be very careful about declaring victory — to be very careful about some assets, particularly in the stock market,” said Summers. “It may be priced a bit for perfection.”Oil hovered near its highs of the year as the International Energy Agency added to a drumbeat of forecasts that the market will tip into a significant deficit in the second half of this year.
The strategists view on OPEC: “The latest extensions of voluntary production/export cuts highlight the unity of the alliance .... We believe this doesn’t translate into weaker demand outlook and this has once again been shown in OPEC’s latest demand forecast. Rather, the cuts aim to further reduce global oil inventories and mitigate downside price volatility and should be viewed as conducive for the sector’s investment programme.