US central bank in the spotlight

Global financial markets are keenly watching whether the US Federal Reserve (central bank) will lift interest rates for the first time in six years. Economists are divided whether Fed chief Janet Yellen will increase rates this week, next month, or next year, given the ongoing volatility in the market. Here's what experts are saying in the run-up to the Fed's decision on Thursday

While investors are grappling with whether the Fed will raise rates for the first time in six years in September, it is worth highlighting that MSCI Asia ex-Japan has fallen by 25% from the highs in the current episode, versus corrections of 14% during the 2013 Fed taper episode, 21% in the 2004 Fed tightening episode and 25% in the 1994 Fed tightening episode

-Sakthi Siva, head of Asia-Pacific and global emerging markets equity strategy, Credit Suisse

 
Skipping September will raise the risk of more turmoil. Since it is all about signalling now, I would raise rates on Thursday by 10 to 15 basis points

-Erik Nielsen, chief economist at UniCredit SpA

Fed rate raise would deliver positive signal on the US economy and remove uncertainty. (We) expect a steady improvement in market sentiment on the back of gradual Fed tightening, moderate reflation policy in China, both fiscal and monetary, and more liquidity injections from Japan, euro zone

-Societe Generale

It would certainly be unusual, and surprising but then, after the last eight years or so of unconventional monetary policy, unusual is becoming the norm

-ING Bank NV

The Fed loves the fact that the Chinese have begun to let the currency float down. They have an excuse not to increase interest rates

-Marc Faber, renowned investor and publisher of the Gloom, Boom & Doom Report

The rates are going to go higher, markets are going to go down, people are going to say, 'save civilisation'

-Jim Rogers, renowned investor and founder, Rogers Holdings (to Yahoo Finance)

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Source: Bloomberg, research reports