NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases a macro-market research report entitled “FOMC: Few Clear Choices in September or Beyond.” The report makes the following key points:
- As markets look forward to the decision by the Federal Open Market Committee (FOMC) whether or not to raise short-term interest rates in September, KBRA notes that investors face continued uncertainty with respect to the medium-term direction of U.S. interest rate policy.
- The key factor for investors to appreciate is that the debt overhang and increased regulation, and thus decreased credit growth, will greatly limit the potential for real expansion in jobs or consumer demand. This raises questions as to the ability of obligors to service existing obligations.
- KBRA believes that there is a growing disconnect between the market’s expectations for higher interest rates and the reality in the financial markets and the U.S. economy. Equity markets are focused on higher interest rates as a confirmation of a supposed economic recovery with low inflation. But the money markets are telling a different tale, one of excessive liquidity driving asset prices higher even as real short-term interest rates are heading negative.
To view the full report, please use the following link: www.krollbondratings.com/show_report/2848
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About Kroll Bond Rating Agency
KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).