Why Unemployment Worries Have Reduced
Job additions, which had scared policymakers and market participants alike with the downward revision for April and dismal additions in May, seem firmly back on track.
Inflation was cited as a major reason why some policymakers weren’t keen on a rate hike in September.
Most FOMC (Federal Open Market Committee) participants toned down their projections for US GDP (gross domestic product) growth in 2016 but expected it to pick up pace in 2017.
Retracting monetary accommodation on time is crucial as well. This was the chief reason why three dissents took place in the September FOMC.
The September 2016 FOMC (Federal Open Market Committee) meeting was characterized by three dissents to the status quo on the federal funds rate.
The credibility of the Federal Reserve was a concern raised by some policymakers at the September FOMC (Federal Open Market Committee) meeting.
The issue of the Fed’s credibility is not a new one. The effectiveness of the prolonged monetary accommodation has sparked a lot of debate in the past.
The September FOMC (Federal Open Market Committee) meeting had surprised market participants with three dissenting votes.
As international organizations like the International Monetary Fund call for more public investment to boost economic growth, fiscal spending is clearly on top of the investor’s agenda worldwide.
Excess production capacity in many sectors is a global concern that has affected the broader economic growth.
For the first time since the end of the financial crisis, fiscal policy in many developed countries (IVV) (EFA) is gradually turning more expansionary.
The consistent decline in public spending over the last 20 years has led to weak and inefficient infrastructure in the US. According to the Bureau of Economic Analysis, the average age of highways and streets is 28.4 years.
With the exception of a few countries like Brazil, the trend is clearly in favor of higher infrastructure spending.
With global growth still subdued despite loose monetary policy and rock-bottom interest rates, the case for fiscal stimulus has become more compelling.
Fiscal policy has turned more expansionary, with stress on fiscal spending and monetary easing, thereby flooding the financial markets worldwide with huge liquidity.
US retail sales showed a strong performance in September 2016, rising 0.6%, as compared to the 0.2% fall in August 2016.
The performance of ACWI depends on the performance of key global indicators, which investors track to identify the movement of the global market.
Eurozone investor confidence has shown signs of recovery in October 2016. The Sentix Investor Confidence Index stood at 8.5 as of October 12.
The German ZEW Indicator of Economic Sentiment has given a strong performance in October so far, rising to 6.2 as compared to 0.5 in September.
According to the Energy Information Administration report on October 12, US crude oil inventories rose by 4.9 MMbbls for the week ending October 7.