Wednesday, September 2, 2015

Normalization of Rates Likely But Many Still See The Fed on Hold Indefinitely

News
Reports over the weekend that China would abandon support for its stock market and fears that the Fed will 'normalize' its interest rate policy has US stock futures point down this morning. The Fed, which is regularly criticized by those that believe the business cycle can be managed, realizes that public debt will be vulnerable during the next economy contraction. Simply put, everyone from local and state governments, pension funds and insurance companies - big holders of public debt need a normalization (higher) rates to survive. This concept won't be embraced until an unexpected change of policy smash through public and private portfolios.

Headline: US set for lower open with Beijing still in focus

U.S. stock index futures pointed to a lower open on Monday, as European and Asian stocks traded mostly lower on concerns that Beijing might change tack in its efforts to boost the stock market.


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