A MarketWatch opinion column argues investors should watch financial conditions rather than the rate itself. The Fed is not expected to raise rates on Wednesday, but it is expected to do so again before year-end.
The Federal Reserve is not expected to raise interest rates at its meeting on Wednesday, but it is expected to deliver another rate hike before the year is over. Whether it should is a separate question, writes columnist Michael Kramer, and he says most evidence suggests it should.
Kramer, founder of Mott Capital Management, points to financial conditions as the signal that matters. He says they have begun to tighten but remain fairly loose.
As evidence, he cites the Chicago Fed's National Financial Conditions Index, which stands at only -0.50, a historically low reading. A rise toward zero means conditions are tightening, while a fall further below zero means they are easing.
Source: MarketWatch (snippet-based)
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