If this market turmoil forces a US rate cut, the outlook will truly be grim

Discussion in 'Market News' started by Lily, Jan 20, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    A global economy in robust health ought to be able to withstand action by the Fed at the same time as a market correction. But it’s not clear that it can

    This time last month stock markets were starting an end-of-year rally, cheerfully regarding the US Federal Reserve’s small increase in interest rates as evidence of the underlying strength of the global economy. Now, says William White, former chief economist of the Bank for International Settlements, the situation is as bad as in 2007, the onset of the banking crash.

    The FTSE 100 has lost 9% of its value since the turn of the year. The yield on 10-year US Treasuries – a harder gauge of risk-aversion – has fallen to just 2%, even as inflation appears in the US. What has happened to turn financial markets on a sixpence?

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