Economy Not Deterred By Interest Rates

Economy Not Deterred By Interest Rates

In 2015, we have seen very little in the way of pessimism in the financial markets.  Many commonly traded indices are reaching record highs and national employment numbers are the strongest they have been in a half-decade.  So there is a good deal of optimism that is present in the markets — but does this mean that all assets should be traded from the bullish perspective?  Or does this mean that forex traders will now need to exercise a better level of caution given the fact that the market’s recent trends could in fact turn at any time?

These are both important questions for traders to be asking themselves.  But at the moment, it does appear that the balance of the evidence favors the idea that the current market economy is not deterred very much by the prospect of higher interest rates.  This is clear mostly because stock prices have not seen many down days that accompanied new market commentary by the US Federal Reserve highlighting the need for higher interest rates.  We have seen some downside moves in recent days because of the heightened potential for a Greek exit from the European monetary union.  Moves like these, however are temporary in nature and so the real long term factor will continue to be interest rates and the next decisions from the Fed.  

Broad Market Trends

Market reports from Financial Marketing Agency MediaGroup London have shown that trading trends generally change in the summer months, so there is also an added market that we could see rounds of profit-taking in the next few weeks.  Going forward, it will be important to determine whether or not trends are likely to be changing based on changes in interest rate commentary by the Federal Reserve.  We have not yet seen an actual rate increase so there is still the possibility for the market majority to change course once the events actually start to happen.  

Based on what has already been said, there is a definite possibility that the Fed could move as early as the next few months.  So if you think you will be able to separate yourselves from the financial markets during the summer months there is a strong possibility that you might miss a major market moving event.  The main keys to watch for will be any indication that the Federal Reserve is worried about potential inflation levels in the next few years.  If this occurs, the market could start to revert to something closer to panic mode.