The Fed Rate Hike Could Have Political Implications

There are two big events that will help define the 2016 presidential race. The first takes place Wednesday night with the second GOP primary debate. The second happens Thursday with the Federal Reserve’s announcement on interest rate policy. Of the two, the Fed’s call is the most important.

Because if Janet Yellen and the central bank make a mistake and move too fast to raise rates—or continue to send mixed messages that markets don’t really understand—it could cause further turmoil and wind up slowing down the U.S. economy in ways that could prove fatal to the Democratic nominee.

Already,leading liberals are pressing Yellen and the Fed hard to wait and not raise their benchmark rate at this week’s meeting, arguing that to do so could cause unemployment to rise again and snuff out nascent gains in workers’ take-home pay.

via CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza