What tools do the central planners really have to counteract an economic slowdown? The Fed has kept interest rates at 0 since 2008, right? Would they do another round of quantitative easing? From what I understand, monetary policies to stimulate growth are pretty much exhausted.
I am not sure. Based on US economic data, a hike this fall looks likely. Monetary easing is part of the reason the markets are where they are at. As their mandate is based on employment and inflation, I don't think the Fed is overly concerned about a market correction.
Remember that the stock market is not a good indicator of the state of the economy. The economy is actually starting to pick up more or less. But if was really that bad they still have the RRR (required reserve ratio) that they can change that lets banks lend out more of the money they own.
2006. It's been argued by many a monetary theorist that you can't have bull markets without bear markets and the goal isn't to keep things going up up up up up, it's to keep things stable. It worries me a little that monetary theorists talk about money the way forest service guys talk about controlled burns but I've also seen a conflagration or two in my life, both literally and figuratively. MY GUESS - the US is in better shape right now than any country in Europe or Asia. I reckon they go ahead and raise rates a quarter point anyway because it'll hurt more elsewhere. Mauldin & Co are pretty well convinced Abe started the currency war in 2013 so this is just an escalation.