Bank Hapoalim (TASE: POLI) chief economist Prof. Leo Leiderman commented today on the upheaval in stock markets, saying, "The tumult in global markets is liable to lead the US Federal Reserve Bank under its new chairperson, Jerome Powell, to postpone the next interest rate hike in the US, which in itself can help calm the markets. This assumes an absence of inflationary pressures, which do not appear imminent right now." Powell was sworn in as chairperson yesterday, replacing Janet Yellen, who served a four-year term in the position.
Leiderman made these remarks to "Globes," and will lecture on the subject at length today at Tel Aviv University at an "Upheaval in the Global Arena" forum organized by the Coller School of Management.
Leiderman explains, "As of now, there is no change in the fundamental affecting the markets. On the contrary, the state of economic growth, employment, and business profit margins in the US and the leading European countries shown by the recently published indicators still provides a good surprise. It is likely that the steep falls in the market are more indicative of a correction of high price levels than a reversal of the trend.
"Past experience shows that even in a market with a positive trend, substantial corrections are possible from time to time. Even if the current situation is a correction, exactly when and how it will end is unpredictable."
Published by Globes [online], Israel Business News - www.globes-online.com - on February 6, 2018
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