Tags: dennis gartman | rates | economy | fed

Dennis Gartman: 'We're Stuck With Low Interest Rates for a Long Time'

Image: Dennis Gartman: 'We're Stuck With Low Interest Rates for a Long Time'
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By    |   Thursday, 07 Jul 2016 09:45 AM

Influential investor Dennis Gartman advises that investors shouldn't expect any move from the Fed for up to another year.

"I think the FOMC used the referendum (on the U.K. leaving the EU) as a reason to do nothing,” he told CNBC.

“They would prefer doing nothing and they will probably do nothing for a long period of time. 'Lower for longer' is probably the way to consider what the Fed is going to do for quite some long period going forward," Gartman, the founder and publisher of the Gartman Letter, said on Thursday.

"There is a lack of resolve on the part of the economy here in the U.S. We're moving forward at a very tepid rate and I think we're stuck here at these low levels of Fed funds for a long period of time, certainly until the end of this year and perhaps into the middle of next year."

For much of this year, the dollar, oil prices, and economic conditions largely behaved as the U.S. Federal Reserve had expected, allowing policymakers to plot further interest rate increases.

Since Britain's June 23 vote to leave the European Union, every piece of economic data, such as Friday's jobs report, comes with a question mark - how much does it reflect domestic economic developments and how much the short and long-term implications of an economic reordering that may take years to play out, Reuters reported.

For Fed policymakers it means balancing the mainly positive flow of U.S. indicators against the risk that major trading partners fall into recession, the dollar surges again, or the terms of Britain's divorce stress the global financial system.

With past overseas events of similar importance, such as the euro zone debt crisis, it has taken the Fed months to get clarity. Brexit may prove just as difficult to decipher, already helping lift the dollar and drive U.S. Treasury yields to historic lows - both trends making it harder for the Fed to move.

"You don't know how long that is going to last and indeed we don't know the magnitude," Federal Reserve Governor Daniel Tarullo said. "I doubt there will be a moment where people say, OK, Brexit is done."

(Newsmax wire services contributed to this report).

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Influential investor Dennis Gartman advises that investors shouldn't expect any move from the Fed for up to another year.
dennis gartman, rates, economy, fed
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2016-45-07
Thursday, 07 Jul 2016 09:45 AM
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