THE United States becomes the focus of global attention in the markets this week, when the Federal Reserve meets to consider further interest rate increases to cool the robust US economy.
Market players on both sides of the Pacific have differing views about what action the central bank policy-makers will take at the two-day meeting starting on Tuesday.
While many Fed watchers expect a 50-basis-point rise in short-term interest rates, some anticipate a 75-point increase.
Others feel the rates will be left unchanged, considering the financial woes in Mexico and the recent bankruptcy filing by California's Orange County after its investment fund incurred huge losses due to rising interest rates.
Hugh Johnson, head of the investment policy committee at First Albany Corporation, said that despite strong bonds, the market was slow due to investors' uncertainty about interest rates.
Eugene Peroni, chief technical analyst at Janney Montgomery Scott Inc, said that until the outcome of the Fed meeting was known, 'I expect the market to drift and stay in a narrow range'.
