Oil prices are plunging, the ruble and Russia's economy are in free fall and financial markets around the world are showing fragility.
The Federal Reserve might respond to that by slowing its schedule to increase interest rates, says David Rosenberg, chief economist at Gluskin Sheff + Associates.
Most economists expect the Fed to begin its hikes around the middle of next year. The central bank's target rate for federal funds has stood at a record low of zero to 0.25 percent for six years.
"The Fed would like to start raising rates. Under normal circumstances, they probably would — sooner, rather than later — based on the fact that we're at zero and the labor market is firming," Rosenberg says, according to Bloomberg Businessweek
"The problem is that these are not normal times. The Fed has never turned a blind eye to the rest of the world."
Fed policymakers act much like portfolio managers do, Rosenberg says. "It's all about probabilities. They operate across a whole curve of expected outcomes. My sense is that there are reasons to raise rates. There are also reasons to wait. History is that when there's global volatility and uncertainty, they tend to sit back and assess the situation."
Others agree that the Fed will move cautiously. "With inflation low and wage growth weak, the Fed can afford to be patient. A pickup in wage growth in 2015 won't likely change matters, either," Tony Crescenzi, market strategist at Pimco, told CNBC
The personal consumption expenditures price index rose 1.4 percent in the 12 months through October, well below the Fed's target of 2 percent, and average hourly wages climbed only 2.1 percent in the 12 months through November.
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