A warning from the world bank chief economist saying the fed needs to delay a rate rise, a damn WARNING??? What does that tell you right there, says it could RISK TRIGGERING "PANIC AND TURMOIL" Let me say that again "PANIC AND TURMOIL", ONE MORE TIME "PANIC AND TURMOIL, NOW say it with me "PANIC AND TURMOIL"....they then say to hold out until "THE GLOBAL ECONOMY IS ON SURER FOOTING" surer footing, how much of surer footing do you need? I guess all that stimulus and trillions and trillions from the central banks isnt doing a damn thing to create this "SURER FOOTING" the world bank chief is actually looking for, so that should clue you in that what ever the central banks are doing is far worse than letting the system do its own thing and letting the free markets do what they are meant to do WITHOUT any intervention. This is proof that the world economy is weaker than what the media and numbers portray...its all there, any rate hike would put the world into a deep dark recession, as I said a million times and will repeat it over and over again the fed has failed, they have zero exit plan, with the next crisis coming there is no way to stop it this time around, it will be a total collapse of all economies....they think all this stimulus worked but will soon find out it was a complete failure right from the start....lets see the fed get out of this next crisis with their famous QE magic HAHA.... World Bank chief economist warns Fed to delay rate rise Shawn Donnan and Sam Fleming 18 Hours Ago The U.S. Federal Reserve risks triggering "panic and turmoil" in emerging markets if it opts to raise rates at its September meeting and should hold fire until the global economy is on a surer footing, the World Bank's chief economist has warned. Rising uncertainty over growth in China and its impact on the global economy meant a Fed decision to raise its policy rate next week, for the first time since 2006, would have negative consequences, Kaushik Basu told the Financial Times. His warning highlights the mounting concern outside the U.S. over the Fed's potential "lift-off." It follows similar advice from the International Monetary Fund where anxieties have also grown in recent weeks about the potential repercussions of a September rate rise. That means that if the Fed's policymakers were to decide next week to raise rates they would be doing so against the counsel of both of the institutions created at Bretton Woods as guardians of global economic stability. Such a decision could yield a "shock" and a new crisis in emerging markets, Mr. Basu told the FT, especially as it would come on the back of concerns over the health of the Chinese economy that have grown since Beijing's move last month to devalue its currency. He said that, even though it had been well-advertised by the Fed, any rise would lead to "fear capital" leaving emerging economies as well as to sharp swings in their currencies. The likely strengthening in the dollar would also hamper U.S. growth, he said. "I don't think the Fed lift-off itself is going to create a major crisis but it will cause some immediate turbulence," Mr. Basu said. "It is the compounding effect of the last two weeks of bad news with that [China devaluation] . . . In the middle of this it is going to cause some panic and turmoil. "The world economy is looking so troubled that if the U.S. goes in for a very quick move in the middle of this I feel it is going to affect countries quite badly," he said. After spending months priming investors for a rate rise this year, the Fed faces an intense debate at its September 16-17 policy meeting over when to raise interest rates and how to balance evidence of a resilient domestic economy against gyrations in global financial markets driven by fears of a China slowdown. Read MoreFed won't hike rates into volatile market: Economist Mixed signals have recently been emerging from the central bank about the prospects of an increase this month. While the labour market is continuing to strengthen, officials are worried that inflation will be weighed down by the higher dollar and recent falls in commodity prices. The Fed's chair, Janet Yellen, has repeatedly signaled that she expects to raise rates this year for the first time since 2006. She has only three meetings of the Federal Open Market Committee left this year if that expectation is to be fulfilled. The impact of China's slowing economy on the world was highlighted by trade numbers released on Tuesday that showed both exports and imports slowing in August versus the same month last year. Read MoreFOMC's Lacker: Fed should raise rates soon Mr. Basu said the World Bank's June forecast of 2.8 per cent growth for the global economy was now under threat from the slowdown in emerging economies such as China and Brazil as well as anemic growth in industrialized economies bar the U.S. "There is a concern in emerging economies all around in case China takes a hit," Mr. Basu said. "This is the problem right now in the world . . . Overall we are going to get into a slower global growth phase. "All this put together and what has happened over the past two weeks with the Chinese markets leads one to believe the scenario is looking worse than it did even in June."
What? The world's economies and markets are sooooo marginal and fragile, even a 0.25% interest rate hike could bring down the entire "credit bubble house of cards?"
Well i do believe artificially low interest rates buries leverage into the system... capital chases yield down to very low yields.. interest rates rising has a convex affect against those positions.. just like when controls were set into place to allow for mortgage credit expansion.. They place controls that create malinvestment, then blame it on the free market, and justify more of the poison controls