Pictet multi-asset fund managers Andrew Cole and Shaniel Ramjee:
Cole: My guess is that they won’t raise this week. It looks like it will be done in December. Given how poor the last twelve months has been for emerging markets, they could take the view that we can put rates up and it won’t do any more damage than has already been done though.
Ramjee: Whether they do it or don’t do it I don’t think it is going to be a positive event because if they don’t they are saying that the global economy is weak and if they do it they are draining dollar liquidity out when the rest of the world needs it most.
Nitesh Shah, associate director – research, ETF Securities:
“The US Federal Open Market Committee will convene this week to discuss raising interest rates. We don’t believe they will pull the trigger on this occasion, given the uncertainty surrounding the deceleration of China and Europe and elevated financial market volatility. The last time the central bank increased rates was in 2006 and will not take this decision lightly. A policy reversal will be costly for the Fed’s reputation and we think the central bank will err on the side of caution while it assess whether these risks are likely to drive price expectations lower or hurt labour market prospects. A surprise rate rise could be gold price negative.”
