Wall Street is angry after the Fed’s latest Federal Open Market Committee (FOMC) meeting.
The Fed’s main responsibilities to the U.S. are price/currency stability and employment, but many on Wall Street think the Fed has strayed too far into worrying about global response, and how their actions affect/are affected by other global economies and situations.
Wall Street is saying that the Fed has refused to raise rates recently due to worry over global growth instead of looking at domestic growth, which they believe to be the Fed’s main responsibility.
Originally the Fed indicated that they would slowly raise rates this year, which will help strengthen our balance sheet, decreasing inflation and increasing the value of the dollar.
But now, with the original rate increase already halved, savers must wait and see if those rates are going to rise during the FOMC meeting in June.
Most analysts however, believe this to be unlikely, with only 19% saying they thought the rates would increase in June, and over half of Wall Street saying they don’t see a chance of those rates increasing until the November meeting.
Investors and savers who were banking on rate hikes have lost money, and they aren’t happy. Many are angry and confused. If our economy could benefit from the increase, they say, why not go for it instead of acting as though the Fed is responsible for the world’s economy?
Instead of providing clarity for the the U.S.’s economy, the Fed has clouded the judgment of everyone, including Wall Street.
Janet Yellen, chairwoman of the Fed, seems more concerned with world economic growth than that of the United States. She’s concerned by the loss of much of China’s manufacturing sector, and the drop of Japan’s industrial production, rather than on the economy she’s supposed to be directing, the United States’.
In fact, during her speech after the FOMC meeting in April, she used the word “global” more frequently than any other. Shouldn’t this be a signal that something is going wrong with the Fed, when the chairwoman spends more of her time speaking about global issues rather than domestic?
No one entity can totally help or harm an economy, but it would be nice if the Federal Reserve of the United States was actually trying to work on ours.
Click here to read more about Wall Street’s latest opinion of the Fed at CNBC.