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'Guessing Game' About Fed More Harmful Than Actual Rate Hike

'Guessing Game' About Fed More Harmful Than Actual Rate Hike
(Richard Drew/AP)

By    |   Tuesday, 18 August 2015 09:56 PM

It's time for the Federal Reserve to finally start raising interest rates because uncertainty over the central bank’s action could be causing more harm than an actual hike, Tom Hutchinson, senior editor of the Newsmax newsletter "The High Income Factor," told Newsmax TV.

“The markets have largely priced in a rate hike before the end of the year,” he told “Newsmax Now.” “There could actually be some relief when they actually do raise them,” he said.

The Federal Reserve is expected to raise its key interest rate next month for the first time in almost a decade. The move would signal that the U.S. economy is healthy.

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Most experts expect a Fed rate hike in less than six weeks, on September 17. But there are contrarians out there. Among them, Goldmans Sachs announced in June that it believes the Fed won't raise rates until December.

“What's hurting it more now is the uncertainty, this guessing game. Are they going to raise them? Are they not? I mean they said they would. It's time to go ahead and raise them.”

He doubts markets will drop once the central bank finally acts.

As for the direction of the stock market for the rest of the year, “stock prices have sort of built in a strong second half for economic growth,” he said.

“Because of the problems in China that we have seen and the once again sputtering of the global economy, I don't think the second half is going to be as strong as once thought. There's not a lot that can propel stocks higher from here,” he said.

“The only thing holding the market up is there's still no place else for money to go. It'll take a higher degree of fear to scare people into zero or near zero returns. We don't have that yet but I don't see around the corner how the market goes much higher from here. For this point in the near future, there's more downside than upside,” he said.

(Newsmax wire services contributed to this report.)

About Tom Hutchinson
Tom Hutchinson is a member of the Newsmax Financial Brain Trust. Click Here to read more of his articles. He is also the editor of The High Income Factor. Discover more by Clicking Here Now.

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It's time for the Federal Reserve to finally start raising interest rates because uncertainty over the central bank’s action could be causing more harm than an actual hike, Tom Hutchinson, senior editor of the Newsmax newsletter "The High Income Factor," told, Newsmax TV.
federal reserve, rate, hike, stocks
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2015-56-18
Tuesday, 18 August 2015 09:56 PM
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