A September rate hike is now unlikely due to recent turmoil in the stock markets from China’s volatile economy, a fed official went on record saying after this week’s Black Monday.
New York Fed President William Dudley said the prospect of a September rate hike "seems less compelling" than it was only weeks ago. However he warned about overreacting to "short-term" market moves, and left the door ajar to raising rates when the U.S. central bank holds a policy meeting on Sept. 16-17.
"At this moment, the decision to begin the normalization process at the September FOMC meeting seems less compelling to me than it was a few weeks ago," Dudley, a close ally of Fed Chair Janet Yellen, said of the policy-making Federal Open Market Committee.
According to the article, this might have been a planted message from the Federal Reserve.
The comments were unprompted and made at a press briefing on the regional economy, suggesting they were a deliberate message from the broader Federal Reserve after a sharp two-day selloff in Asian, European and U.S. stocks.
Either way, the article noted that the comments did briefly help lift bonds and stocks.
The impact of Black Monday went far enough to damage housing stock as well, with the collapse hitting the stocks that drive the housing and mortgage finance economy worse than the major indices in early trading.