The Standard & Poor’s 500 index fell from a record, following declines in emerging-market equities and commodities, as a slowdown in China’s exports fueled concern the world’s second-largest economy is moderating.
Federal Reserve Governor Jeremy Stein endorsed a warning by economists that raising the main interest rate may cause a financial-market convulsion similar to the “tantrum” that occurred last year after the Fed said it was considering trimming its bond purchase program.
Prices in the U.S. may increase more than many expect this year, says David Rosenberg. That’s a 180- degree turn for the economist who not long ago correctly predicted a declining inflation rate, a view now prevalent among his peers.
Federal Reserve Bank of Chicago President Charles Evans, who has supported record stimulus, said the central bank’s slowdown in bond buying should be seen as a shift in emphasis toward keeping interest rates near zero for a longer time.
Two Federal Reserve district bank presidents signaled a decline in global stock markets probably won’t deter the Fed from further trimming bond buying that has pushed up central bank assets to $4.1 trillion.
The economic expansion in the U.S. is sufficiently entrenched to withstand a short-term slump in stock prices and weakness in emerging markets, keeping the Federal Reserve on track to trim stimulus, economists say.
The U.S. economic expansion is sufficiently entrenched to overcome a short-term slump in stock prices and a cooling in emerging-market growth, keeping the Federal Reserve on track to reduce stimulus, economists say.