The turmoil in global stock markets is not an argument to wait before raising interest rates or an excuse to re-start quantitative easing. The Chinese markets were reacting to a weakening Chinese economy, rapid changes in Chinese government policies and attempts by the government to manage stock prices. The US markets were over-valued and due for a long awaited correction. While a rate increase is a negative for stocks, reducing uncertainty and getting passed the first move is a positive for the markets.
No guarantees, but a 60% change of a rate rise on September 17th.
This article was written by David Blitzer, Chairman of the Index Committee, S&P Dow Jones Indices.
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