Market Action

• Another FOMC meeting and another pass on a rate hike as the Federal Reserve left rates unchanged and lowered its forecast for future interest rates. Stocks rallied even though Chairwoman Yellen provided a strong indication that a hike will occur before year-end.
• Japan also left rates steady but changed its targets for monetary policy. The central bank announced a target of 0% for the 10-year bond and left further rate cuts as an option.
• The OECD reiterated its view on the economy being in a “low-growth trap” and predicted global GDP would only expand by 2.9%, the lowest since the financial crisis.
• Saudi Arabia offered to lower oil production if Iran agreed to an output cap for the balance of the year. Oil has continued its weekly swings based upon chatter of an output cut, market oversupply, and the strength of the dollar.
• Two EU Ministers announced their desires to see negotiations on two separate trade deals suspended. Appetite for more liberal trade has waned due to political populism and protectionist sentiments in the midst of weak growth.
• The Bank of International Settlements announced that China is at risk of a banking crisis within the next three years according to a metric tracked by the bank. The report cites China’s excessive credit growth as causing a bubble.

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