Tags: Wilbur Ross | Fed | Rate Hike | Emerging Markets

Wilbur Ross Sees Reduced Likelihood of Fed Rate Hike This Year

Wilbur Ross Sees Reduced Likelihood of Fed Rate Hike This Year
Wilbur Ross

By    |   Monday, 21 September 2015 08:00 AM

Veteran investor Wilbur Ross, chairman of WL Ross, wasn’t surprised that the Federal Reserve didn’t hike interest rates, a move he said should boost emerging markets.

“What did surprise me was that the president of the Richmond Virginia Fed was the only one who voted in favor of an increase,” he told The Economic Times.

“And that probably reduces the likelihood of rate increase either in the October meeting or in the December meeting,” he said.

The Federal Reserve ended weeks of speculation Thursday by keeping U.S. interest rates at record lows in the face of threats from a weak global economy, persistently low inflation and unstable financial markets. 

The ultra-low loan rates the Fed engineered were intended to help the economy recover from the Great Recession, the AP reported.

In maintaining its policy, the Fed is keeping its benchmark short-term rate near zero, where it's been since the depths of the 2008 financial crisis. A higher Fed rate would eventually send rates up on many consumer and business loans.

Some analysts worry that ultra-low rates are encouraging more risk-taking by investors and could inflate bubbles in the stock market or other assets.

Meanwhile, the lack of a rate hike “is probably very helpful for the emerging markets,” he said.

“I think one of the big concerns in the emerging markets has been what the Fed would do because those markets outside the U.S. tend to be a lot more volatile than the U.S. markets, so small changes here have a lot to do with there," he said.

"And if there had been an increase, it probably would have meant a stronger dollar relative to most other currencies. So there are number of implications for a variety of different markets,” he said.

As for investment opportunities in emerging markets, Ross favors India over Russia, Turkey and Brazil. He suggests consumer-oriented companies and healthcare as among the top industries in India to consider.

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Veteran investor Wilbur Ross, chairman of WL Ross, wasn't surprised that the Federal Reserve didn't hike interest rates, a move he said should boost emerging markets. "What did surprise me was that the president of the Richmond Virginia Fed was the only one who voted in...
Wilbur Ross, Fed, Rate Hike, Emerging Markets
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2015-00-21
Monday, 21 September 2015 08:00 AM
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