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Ongoing Angst over Rate Hike Prospects

If the Fed were to forgo a rate hike on Thursday, it may lose some ability to keep future increases as gradual as the bond market would like.

By Liz Capo McCormick, Bloomberg | Updated on September 15, 2015

As the Federal Reserve prepares to raise interest rates for the first time since 2006, almost all the talk of a potential policy misstep has centered on the peril of hiking too soon.

The bigger concern is that the Fed may wait too long, say Thomas Lam at RHB Securities Singapore Pte. Ltd and David Glocke at Vanguard Group Inc. A decision to keep the overnight rate near zero on Sept. 17 may wind up jolting debt markets more than actually raising it, said Lam, who according to Bloomberg was the fourth-most-accurate forecaster of the U.S. economy last quarter.

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