Financial market 'pause party' makes Fed rate cut less likely

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Risk-taking has been the rage since the Federal Reserve quit hiking interest rat...

WASHINGTON/NEW YORK - Risk-taking has been the rage since the Federal Reserve quit hiking interest rates at the end of last year. U.S. stocks are back near record highs and investors are stockpiling the lowest-grade corporate bonds with only a smidgen of extra compensation for the added risk.

But if anything the ‘pause party’ on Wall Street makes it even less likely that the U.S. central bank will cut rates. Recent positive news on retail sales and exports, which have eased concerns of a sharply slowing economy, makes the case for a rate cut even weaker. After a decade of near zero interest rates, “moving toward a constellation of asset prices that embodies risks is critical for getting us to a more stable financial market,” she said, noting that both equity prices and low-grade bond yields show a market that remains too sanguine.

Financial stability isn’t a formal mandate for the Fed, which under congressional legislation is supposed to maintain the twin goals of maximum employment and stable prices. But since the crisis the central bank has concluded that keeping financial markets on an even keel is a necessary condition for achieving the other two aims.

 

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All world wide today R living in the pressure cooker, blowing off steam in ways wouldn't if life were not as it is.would be not need to transfer our pain onto others,would all get along, living life large free of worry & doubt. Someday it will be that way.listen 2 his word, learn

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