U.S. GDP, BoJ negative interest rate policy help calm global markets

In this week’s video update:

  • Q4 U.S. GDP comes in at economists’ expectations; increases at a tepid 0.7% annual rate
  • Oil prices held slightly higher this week, but “How low can oil go”?
  • Global markets react positively to the Bank of Japan’s (BOJ) decision to adopt a negative interest rate policy

Chief Investment Strategist Erik Ristuben joins host Alexandra Davis on this week’s Market Week in Review update to discuss the U.S. Federal Reserve’s decision to not raise interest rates on Wednesday, Jan. 27, showing the Fed is still in a “wait and see” mode. With the Q4 U.S. GDP number coming in at expectations, Ristuben notes in his view there is enough good U.S. economic data on the table for a potential upcoming rate hike in March (see more in our 2016 Annual Global Market Outlook).

Ristuben also examines the initial positive reaction from the global markets after the decision by the Bank of Japan (BoJ) to adopt a negative interest rate policy for the first time. As the BOJ and European Central Bank (ECB) are both continuing to pursue a more active role in financial market stability in their respective markets, it gives the Fed the ability to pursue a diverging path for the U.S. economy. He also comments on the possible bottoming of oil prices, noting the expectations for upward movement later in 2016, given the fact there isn’t enough supply in the oil market as there used to be.