Fed Won't Raise Rates This Month

Markets were all over the place in trading today. Both the Dow and S&P fell while the tech-heavy NASDAQ managed to turn a profit. The Dow fell 65.21 points in trading today, and closed at 16,674.74. The S&P 500 was down 5.11 points and closed out the day’s trading at 1,990.20. The NASDAQ ended the day in the black, gaining 4.71 points and closed up to 4,893.95.

Cablevision (CVC) to be Acquired by Altice

With the ink barely dry on the paper, Cablevision (CVC) announced that it was being acquired by Altice, a publicly-traded European cable conglomerate.
The $17.7 billion deal went public today, and is expected to move forward within the regulatory process as usual. Cablevision had been looking for a buyer for months, and only just began talks with Altice a few weeks ago. In trading today, Cablevision shot up nearly 14% and closed out the day at $32.51 per share.

Fed Doesn’t Move Prime Rate

It’s official, there won’t be any ged action on the price rate until December at the soonest. The Fed left today’s meeting without announcing an increase that many thought was coming. There are a few reasons why the Fed may have chosen not to act, but pressure on them to raise rates at home is mounting.

One of the reasons why the Fed may have kept the prime steady is the fiscal situation overseas. Markets in Asia and Europe have been soft to say the least. The IMF and World Bank have gone so far as asking the Fed to delay rate raises. Still, many analysts thought that the time could be right for an increase of at least 0.05% in the prime.

When the prime interest rate is raised, it affects borrowing and spending across American and globally. Banks pay more money to borrow from the Fed in order to fulfill loans, and that trickles down to everyday consumers. It costs more to lease and buy vehicles, mortgage rates go up, and in general credit is tightened.

The Fed has resisted raising the Prime rate to ensure that as much credit as is reasonably possible is in the marketplace. After the bubble burst in in 2008, credit was affected quite a bit. It became much harder for people to buy new cars and homes. In response, the Fed slashed the prime interest rate to 0%.
Published on Sep 17, 2015
By Aaron Phillips
Aaron Phillips is a financial researcher and journalist based out of Michigan. He regularly writes the IG Daily and IG Weekly columns.

Copyrighted 2020. Content published with author's permission.

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