Published: September 28, 2015
U.S. financial markets have been more stable in September, following a marked deterioration in August. However, investor risk appetite appears to be weaker than before the sell-offs and underlying concerns persist about emerging market growth.
Developments during the last month
- Equity markets in the United States and other advanced economies have been more stable in September, though they have drifted lower since mid-month.
- Oil and corporate bond markets have also been more stable; oil prices and corporate spreads remain near their weakest levels in years.
- Chinese data confirmed a further economic slowdown and accelerating capital outflows in August.
- Emerging market currencies and equities deteriorated further, with a severe sell-off in Brazil after Standard and Poor’s cut its sovereign credit rating below investment grade.
- The Federal Reserve left interest rates unchanged, citing concerns about recent global economic and financial developments. Market participants viewed the decision as more accommodative than expected, leading market-implied expectations for an interest rate increase in 2015 to fall below 50 percent.