Federal Reserve's announcement to leave the interest rates unchanged sparks a global concern regarding the future outlook of global economic. The Wall Street particularly reacts negatively towards the news as most stocks are trading at a lower price forcing the index to close lower.
The global markets witnessed major crash in August following the China's economy slow down, Yuan devaluation, discouraging manufacturing numbers, etc, Now, the markets are recovering. But, economists, fund managers caution that the party is not over. China may slip in recession in next quarter or six quarters later.
A tame inflation complicates the Federal Reserve's decision whether to raise interest rates this week. Data show that despite many signs of economic improvement, the pace of growth of US consumer prices last month was well below the central bank's target.
China faces risks of deflation, as manufacturers' selling prices fall for the 42nd consecutive month in August. The Producer Price Index (PPI) shed 5.9% from a year earlier, much worse than market expectations of a 5.5% decline.
As the supply for homes being sold goes down, statistics suggest an increase of potential buyers. This could lead to boom in house prices. Statistics from the Royal Institution of Chartered Surveyors (Rics) this week expects to see a surge in potential new home buyers as reported by This Is Money. As supply of houses being sold is dwindling, another boom in house prices could well be on the way.
The International group of governments and central bank governors from 20 major economies agreed Saturday to hasten slow growth, saying the low interest rates will not be enough to accelerate economic improvement, but they are optimistic that growth will happen.
Asian shares markets got off to a watchful start on Wednesday as the mounting risks of a hike in U.S. interest rates as early as next month lifted the dollar and sovereign bond yields, pressuring currencies across the region.
Gold fell more than 1 percent to a five-year low on Wednesday as a bounce in the dollar fueled downside momentum, with investors continuing to pull away from the metal after its dramatic slide earlier this week.
Rising interest rates after years of loose monetary policy will pose a fresh risk to banks' ability to absorb losses using capital buffers, the Bank for International Settlements said in its annual report on Sunday.
China's central bank cut lending rates for the fourth time since November and trimmed the amount of cash that some banks must hold as reserves, stepping up efforts to support an economy that is headed for its poorest performance in a quarter century.
U.S. permits for future home construction surged to a near eight-year high in May, suggesting a building up of momentum in housing and the broader economy after a dismal performance at the start of the year.
It may be impossible for the Federal Reserve to raise interest rates until the rest of the world economy improves, Fed board member Lael Brainard said on Tuesday, in the most direct acknowledgement yet of how weak global markets could handcuff the U.S. central bank.
U.S. consumer spending growth unexpectedly stalled in April as households cut back on purchases of automobiles and continued to boost savings, suggesting the economy was struggling to gain momentum early in the second quarter.
Central bankers should be aware of the potentially destabilizing effects of super-easy policy on financial systems, a top U.S. Federal Reserve official said on Monday, even if monetary policy should not be used as a main tool to prevent bubbles.
Federal Reserve Chair Janet Yellen was clearer than ever on Friday that the central bank was poised to raise interest rates this year, as the U.S. economy was set to bounce back from an early-year slump and as headwinds at home and abroad waned.
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