The U.S. economy continues to look strong, prompting the Fed to consider raising interest rates, but concerns about the world economy continue to grow.
Stocks plunged around the world on Friday and the U.S. dollar strengthened with news that it is more likely that the Federal Reserve will raise interest rates before the end of this year — good news for the U.S. economy, but bad news for the world economy as investors continue to worry about international prospects. It was the biggest weekly loss in the last two months for European share markets, and U.S. stocks also had a slight fall, but overall the signs are good for the U.S. economy as the Fed clearly believes the economy is solidly on the rebound and the bigger concern is inflation, not a lack of growth.
Fed officials have been suggesting that raising the benchmark U.S. interest rates could be coming sooner rather than later, and that is prompting investors to adjust their strategies, leading to strong movements in the market in an umber of directions. They’ll be continuing to watch the Fed in the coming months for more signs on what the future holds and where they should place their bets.
The interest rate has been at zero since the economy plunged into a recession in 2008 from the housing market collapse. However, the economy has shown strong signs lately and the Federal Reserve appears increasingly confident that it is steaming along, and so it may raise interest rates again to keep inflation at bay.
The question is how the worldwide economy will do. Europe’s economy in particular has continued to sputter and China’s economic boom may be coming to a halt. An upcoming annual meeting of central bankers from around the world in Wyoming could have a huge impact on investment in the coming monhts.