European and United States markets fall after Fed rate decision

The Dow Jones closed down 65.21 points at 16,674, while the S&P 500 fell 5 points to 1,990.

Emerging market equities rose to one-month highs on Friday and currencies mostly gained against the dollar after the Federal Reserve left USA interest rates unchanged.

If you’re thinking, “That doesn’t sound like holding steady”, you’re right.

“The United States economy would need to show continued weakness, prompting the Fed to loosen rather than tighten monetary policy“, said Mr Menke.

The Fed’s key rate has been stuck near zero since the depths of the financial crisis, and it’s been almost a decade since the central bank raised rates. “Uncertainty about this month´s FOMC meeting is about to end, but don´t expect uncertainty about Fed policy to disappear”, O´Sullivan said.

Ralph Elliott (author of Elliott Wave Theory) theorized that “news will arrive to justify the forecast”, which is based upon the crowd’s behavior.

“Employers and job seekers can celebrate, because the Fed’s decision to hold off on a rate hike gives the US economy a bit more time to hit a stronger stride”, Tara Sinclair, chief economist at employment site Indeed, told U.S. News in an email Thursday. However, as stocks and currencies in emerging markets are vulnerable to higher us interest rates, these countries hope the Fed retains the postponement of the increase for at least a month.

“Heightened concerns about growth in China and other emerging market economies have led to notable volatility in financial markets”, Yellen said. The markets would inevitably go through a rocky ride as they guess if the Fed will raise interest rates in subsequent meetings in October and December. “China is a concern, and oil prices look set to take another leg lower“.

The US Fed said information received since the Federal Open Market Committee met in July suggests that economic activity is expanding at a moderate pace.

At a press conference following the announcement, Fed chair Janet Yellen listed off a number of reasons why the U.S.’s central bank thinks the economy is still too weak for an interest rate liftoff. In Asia, the Shanghai Composite (.SSEC) index closed up 0.42 percent, while Japan’s Nikkei (.N225) finished 1.96 percent lower. In June, 15 Fed officials had predicted that the first rate hike would occur this year.

Business Insider/Andy Kiersz, data from FOMCThe latest “dot plot” still implies the Fed will raise rates at some point this year.

The FTSE 100 fell 1.34%, Frankfurt’s Dax plunged 3.06%, and in Paris the Cac 40 dropped 2.56%.