Daily Market Update – September 21, 2016 (Close)
The Japanese stock market was barely 2% higher this morning as the Bank of Japan announced a change in monetary policy that was reminiscent of what the Federal reserve did a number of years ago as it focused on the yield curve.
All of that is far too complex for me to understand, but somehow the decision in Japan eases the way for the FOMC to do something, as the US would no longer stand to be the only major economy to be in a position to preside over increasing rates.
But still, as this morning was set to begin, no one was then expecting the FOMC to announce an increase in rates this afternoon.
Maybe that’s why stock futures were guardedly higher this morning.
But the Bank of Japan’s decision really does open the door for the FOMC to make a decision to raise rates today seem far more logical and with much less market related risk.
It’s just not expected.
At this point, there still would be some reason to welcome an interest rate increase, if only to get all of this focus to come to its end and to get us to focus on what matters.
It seems as if it has been a very, very long time since we have focused on those things that are important.
Regardless of what the decision would be today and what specific words would be used in the statement, before you know it, someone will realize that there are now only 9 days left to come to some budget agreement or face another government shut down.
It’s inconceivable that would happen, but that has to be where we will get mis-directed next.
Today, markets were happy that there was, in fact, no interest rate increase today and once again didn’t mind the strong suggestion that there would be one before 2016 comes to its end.