Joining us to discuss the possibility of an interest rate hike this week, and its potential impact, are Michael Miller, associate professor of economics at the Driehaus College of Business at DePaul University, and Edward Stuart, professor emeritus of economics at Northeastern Illinois University. "Of course China is important, but the Fed has to worry about the USA economy", said Ron Simpson, director of currency research at Action Economics in Tampa, Florida. Hisao Matsuura, chief strategist at Nomura Securities, said some had bet there would be more stimulus, only to liquidate their positions after the meeting's outcome. Some fear the economy might suffer. The inflation data in Britain provided another sign of the economy bouncing back to health, backing the assumption of the Bank of England or the BOE will follow the Fed in increasing the interest value next year. Yes. "I do expect them to raise rates this time". Until turmoil struck markets this summer, a September rate hike seemed a lock. While China's government has intervened to prop up its domestic market, a recent batch of disappointing Chinese data has spurred further selling. Stocks tumbled. Last week's trading showed hardly any changes in euro-sterling. He acknowledges that the economy "is not firing on all cylinders", but says it's time for the Fed "to do what's called "normalize" rates". Australia's S&P/ASX 200 Index added 0.5 percent. But whether she likes it or not, Janet Yellen runs the world's central bank. Swonk foresees no rate hike this week. Yet moving this month may carry larger risks. "A quarter of a percent raised to that will only make it slightly more painful than it already is". "When we look around at the economy", he says, "we don't warrant a zero rate". "The longer they wait, the more uncertainty and volatility they are creating in financial markets". And the banks would use the money they received to step up lending. The neutral rate is the level where interest rates support trend growth and acceptable inflation. So the Fed needs other tools to influence rates. Hopes for an end to the agony may be dashed even if the Fed pulls the benchmark U.S. federal funds rate up from zero percent, where it has been frozen since the financial crisis of 2008, analysts said. This could have the effect of reducing lending. Restoring some clarity about the Fed's intentions will not be easy given how wide apart economists and investors are right now. The overall participation rate has stabilized at just under 63 percent, with the participation rate also levelling off for people in the prime working years of 25-54. In the bond market, treasuries saw substantial weakness after ending the previous session roughly flat. A sharper rate hike cycle the Fed began during the housing bubble in 2004 contributed to progressively slower economic growth in the following years. "Last month's jump from 0.8% to 1.2% had prompted suggestions that underlying inflationary pressures could be building, but today's drop could provide the Bank with some breathing space to leave interest rates on hold for longer in the face of global concerns", said Ben Brettell, senior economist at Hargreaves Lansdown (LSE: HL.L - news) . Steelers Lounge http://steelerslounge.com/2015/09/gold-retreats-on-stronger-dollar-us-rate-expectations/8975/

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