The Federal Reserve should announce a rate hike at its closely-watched meeting next week, but will likely punt and keep rates at record low levels. ‘The Fed should absolutely raise interest rates,’ said Darrell Cronk, president of Wells Fargo (WFC) Investment Institute. ‘The U.S. economy has more people employed, making more money, producing more goods and services, spending more and corporate profits are at record levels than ever before – if that’s not a recipe to raise rates, I’m not sure what is.’ Cronk thinks, however, that the chances of a rate hike later than September are more likely. Cronk remains neutral on the energy sector, which is grappling with crude prices under $50 a barrel. ‘We’re getting to the point where there could be great value in the sector, but we’re not there yet, so I’d be careful about legging in too quickly,’ he added. A Friday report from Goldman Sachs (GS) suggests oil could slip to $20 a barrel. ‘If oil goes down to $20 a barrel, then there’s something else fundamentally wrong in the global economy – either China’s growth has decelerated materially or deflation has become an issue,’ he added. ‘The supply and demand fundamentals do not suggest to us $20 a barrel.’ Cronk expects oil to finish the year in the lower to mid-40s per barrel.
Subscribe to TheStreetTV on YouTube:
For more content from TheStreet visit:
Check out all our videos:
Follow TheStreet on Twitter:
Like TheStreet on Facebook:
Follow TheStreet on LinkedIn:
Follow TheStreet on Google+:
source
