The markets wait on the Fed decision
Last week’s economic data may have little impact on this week’s Federal Reserve decision. In our view, odds are low that the Fed will raise rates on Thursday at the Federal Open Market Committee (FOMC) meeting.
Employment data remains solid, although there is little direct indication of acceleration in wage growth. Inflation expectations remain well contained and markets have stabilized.
If the Fed chooses to raise rates, we think this will remove some uncertainty from markets and may be a welcome development. If the Fed maintains current near zero interest rates, uncertainty could remain a factor and the market may downgrade its estimation of economic strength.
Last week’s economic data pointed to strength in the underlying U.S. economy, with the highest number of job openings in 15 years and rebounding small business optimism. University of Michigan preliminary September consumer confidence slid a little, perhaps indicating some concern regarding recent market volatility. We believe the U.S. economy remains on solid footing, supported by employment and income growth.
For more information, please go to: https://reserve.usbank.com/insights/market-economic-update.
Robert L. Haworth, CFA, is a senior investment strategist and Darrell Behnke is the Madison market leader for the Private Client Reserve of U.S. Bank.
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