US Economy Too Fragile for Fed to Raise Interest Rates

US Economy Too Fragile for Fed to Raise Interest Rates

US Economy Too Fragile for Fed to Raise Interest Rates

$DIA, $SPY, $QQQ, $VXX

The US economic environment is too fragile for the US Fed to raise interest rates at its 21-23 September meeting.

“The risks are so much more on the downside,” Raymond Dalio, Chairman and co-CIO of $150-B Bridgewater Associates, said Tuesday at the CNBC Institutional Investor Delivering Alpha Conference in New York.

Mr. Dalio disagreed with JP Morgan CEO Jamie Dimon, who said recently that the Fed should raise rates sooner rather than later.

“That’s wrong,” Mr. Dalio responded.

Mr. Dalio, speaking alongside former Secretary of the Treasury Timothy Geithner, acknowledged that the Fed, like other central banks, has little room to maneuver in future recessions given interest rates that are already near Zero.

“If you have a downturn and you don’t have that power -we’ve never been in a world that’s been like this,” Mr. Dalio said.

Ray Dalio said a realistic economic growth rate in the US would be about 1.5 to 2%.

On China, he praised what he called highly capable leaders that would be able to manage through the restructuring of its debt, economy and capital markets.

“I’m not saying it’s not challenging but the idea that is going to blow up … is a very exaggerated notion,” Mr. Dalio said.

Tuesday, the major US stock market indexes finished at: DJIA-258.32 at 18066.75, NAS Comp -56.63 at 5155.26, S&P 500 -32.02 at 2127.02

Volume: Trade on the NYSE was heavy with over 1-B/shares exchanged.

  • Russell 2000: +6.8% YTD
  • S&P 500: +4.1% YTD
  • DJIA: +3.7% YTD
  • NAS Comp: +3.0% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Neutral (0.02) Bearish (-0.38) Neutral (0.02) Bullish (0.42)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Neutral (-0.06) Bearish (-0.38) Neutral (0.07) Neutral (0.14)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Neutral (0.12) Neutral (-0.13) Neutral (-0.01) Very Bullish (0.50)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Neutral (-0.18) Neutral (0.15) Neutral (-0.03) Very Bearish (-0.67)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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