H&W in the Media
US stocks post solid gains a day before crucial Fed meeting
Policymakers at the U.S. central bank will convene a two-day meeting on Wednesday and may decide to raise interest rates for the first time in close to a decade.
Opinions are divided among investors and economists as to whether the Fed will, or even should, raise interest rates this month. On the one hand, hiring in the U.S. is continuing to improve and the housing market is recovering. On the other, there are signs that weakness in the global economy could impact the U.S. economy.
Fed policymakers have kept the central bank’s benchmark rate close to zero for almost seven years, supporting both the economy and the stock market.
The sharp gains on Tuesday came after some mixed reports that showed weakness in some parts of the economy. While retail sales edged higher last month, factory output fell in the same period as automakers cut back on production. A New York Fed survey showed that factory activity in New York state sank for a second straight month in September.
“It’s almost as if the market believes the Fed isn’t going to do anything on Thursday. That’s why people are bidding it up,” said Kevin Mahn, Chief Investment Officer at Hennion & Walsh Asset Management in New Jersey. “However, I do believe (raising rates) would be the right thing for the economy…it’s time.”