Infinity Partners Ltd: FOMC backs away from monetary tightening amid slowing job growth, Brexit.
As widely expected, voting members of the Federal Open Market Committee (FOMC) voted unanimously to leave the Federal Funds rate unchanged in a range of 0.25 – 0.5%. Furthermore, 6 members said they did not see the US central bank raising interest rates more than once in 2016, a significant decrease on the 3 or 4 many were forecasting at the start of the year.
The development marks the second time this year that the Fed has scaled back its plans for tightening monetary policy and, according to Charles Duffey, wealth management executive at Infinity Partners Ltd, the central bank risks seriously damaging its credibility.
Citing overtly hawkish rhetoric in recent weeks from of a number of Fed officials, Duffey suggested that market participants would be far more likely to discount what they had to say.
“We heard some extremely hawkish comments last month from people like Stanley Fischer, Eric Rosengren and James Bullard all of whom more or less said it would be appropriate to raise interest rates 2 or 3 times this year,” he explained.
“Yet here we are, the June meeting concluded and we have a unanimous vote to leave rates unchanged and half of them only seeing one additional hike during what remains of 2016," he added.
The statement accompanying the rate decision indicated that the panel had expressed concerns about slowing job growth and the risks to global growth if Britain voted to end its membership of the European Union.
“To be perfectly blunt, Infinity Partners Ltd simply doesn’t envision a scenario in which the Fed will be able to make good on its forecasts. Frankly, with the economic data we’ve been seeing this year, there’s as much chance that they’ll cut rates as raise them,” said Duffey.
About Infinity Partners Ltd
Infinity Partners has been protecting the wealth and assets of not just the privileged few but for concerned individuals and corporations across all spectrums and borders across the globe. Based in Hong Kong we can offer tax efficient investments to a broad variety of clients who are willing and able to commit to actively pursuing their future goals and dreams. Our comprehensive wealth management products provide surety and peace of mind to all our clients from the most worldly sophisticated investor to the absolute novice. From the global corporation seeking to minimize tax exposure and hedge against unwelcome headwinds to the small start up looking to get the backing and mentoring to succeed. We maintain a “You First” corporate culture. Always putting the needs and goals of our clients first and foremost in our minds.