econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 05 June 2016

Fed Rate Hike "Cycle" Remains Unlikely

from Lakshman Achuthan, Co-Founder and Chief Operations Officer of ECRI

With all eyes on the timing of the Fed's next rate hike, the reality remains that the U.S. economy will stay in a growth rate cycle (GRC) downturn. What we wrote around the time of the December rate hike remains true today: "With the GRC downturn set to deepen, a full-blown rate hike cycle remains improbable" (USCO Essentials, December 2015).

Notably, if the Fed does manage a mid-year rate hike - which itself is uncertain - that would amount to the longest gap on record between the first and second rate hikes. A full-fledged rate hike cycle comprised of a succession of rate increases remains unlikely in the absence of a GRC upturn, which is not on the horizon. Furthermore, a recession starting late this year or early next year cannot be ruled out. Thus, rate cuts remain on the table over the coming year. Meanwhile, prospects for further rate hikes may run into other difficulties, given the global economic outlook.

In that context, ECRI's 20-Country Coincident Index Growth Diffusion Index (20CIGDI, Chart), measuring the proportion of the 20 economies regularly monitored by ECRI whose coincident index growth rates have improved over a 12-month span, has already plummeted to a 38-month low. Please recall that, in the summer of 2014, in contrast to an upbeat consensus, ECRI predicted a global slowdown on the basis of this data and its long leading index counterpart, noting that, "with the 20CIGDI having rolled over and the [20-Country Long Leading Index Growth Diffusion Index] also in a cyclical downturn, reports of easing growth are likely to become more widespread internationally" (ICO, July 2014).

That became amply evident in the commodity price downturn that began around that time, as oil demand fell below expectations. Subsequently, the oil price decline was framed as an oversupply problem, as oil producers decided in the fall not to cut production.

Today, cyclical slowdowns are more widespread internationally than at any time in almost three years. Given the Fed's recent emphasis on global growth, this may create another obstacle to its rate hike plans.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
The Expected Effects of Petitions to Improve the Monetary System
Energy and Falling Productivity
News Blog
Why Mosquitoes Bite Some People
September 2016 Texas Manufacturing Survey Improves Further Into Expansion.
August 2016 New Home Sales Decline On Lower Median Sales Prices.
U.S. Real Wage Growth: Fast Out Of The Starting Blocks - Part 1 Of 2
Who Works More Hours Per Week: Rich Or Poor Countries?
Infographic Of The Day: How The World's Most Iconic Logos Evolve Over Time
Early Headlines: Asia Stocks Down, Fed Wants Banks' Commodity Limits, Treasuries Being Sold, EZ Business Output Softens, France Contraction, Saudi's Boost Banks, Canada Tightens Borders For Chinese And More
Most Read Articles Last Week Ending 24 September
How Britain Owes Its Immigrants A Debt Of Gratitude
Super Mario, The Timeless Bestseller
Explainer: The Nine Swing States That Will Decide The Next US President
How Long Does Apple Support Older IPhone Models
What We Read Today 25 September 2016
Investing Blog
Monday Morning Call 26 September
We're Back Here We Started
Opinion Blog
Heading For A Fall? With Summer Over, Europe Must Face Up To Its Mounting Crises
What If We're In A Depression But Don't Know It?
Precious Metals Blog
War On Cash Turns To $20, $50, And $100 Bills
Live Markets
26Sep2016 Market Update: US Stock Indexes Lower, May Reach One Percentage Lower Before Close, Indicators Bearish
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved