Current Event Discussion Forum
It is important to become connected/maintain connection to the current events impacting corporations across the world. For this discussion forum, scan periodicals, newspapers, and/or academic journals for a current national or international event that you feel has had the most impact on corporate finance this week; that you find most relevant to your specific area of interest; and/or that impacts on your How the Market Works portfolio. There are several ways to find the news articles; however, you may access them through the Penn State Library at no cost. Be sure to browse through several sites before choosing the article to summarize.
Then complete your initial post in the Lesson 10 Current Event Discussion Forum by doing the following:
1. List the headline/title of your selected article in the Subject Line of your post.
2. Link the article you find in the Discussion Forum.
3. Summarize the article, emphasizing your analysis of its importance, relevance to, and impact upon corporation finance.
After completing your initial post:
1. Scan the headlines posted by your fellow students.
2. Pick one headline that is of interest to you.
3. Read the article AND the summary in the discussion post.
4. Share any additional insights that you may have related to that article.
The Fed’s decision to not raise interest rates is likely due to the unknown factors surrounding Britain’s exit (Brexit) from the European Union (EU). Investors and policymakers are likely watching for an increase in financial stress before raising rates, fearing that a hasty hike could cause plunging markets. Other factors the Fed considered when not raising interest rates include reports from May showing a major slowdown in hiring and business investment.
Lower interest rates make corporate and consumer borrowing easier and it generally helps the economy. The Fed’s decision to keep rates at .5% will encourage corporations to borrow money now before rates rise in the future. Since the Fed’s final target is about 2%, a .5% rate is still considered low. Both companies and individuals will want to capture these lower interest rates in order to save money on investments.
Lange, Jason. (2016, July 6). Fed minutes suggest rate hikes on hold until Brexit impact clearer. Reuters. Retrieved from: https://finance.yahoo.com/news/fed-wants-clarity-brexits-impact-180826229.html.
I agree with the post that sought to discuss the nature of Fed’s interest rates about the Brexit from the European Union (EU). It was detailed and provided the source used in a link which is helpful. It clearly explained that the investors and policymakers are observing the interest rates which leads to increased worries. Potential market problems could lead to the plunging of the markets. I also appreciate the ability of the author to indicate that the lower interest rates would assist in improve the corporate and consumer borrowing in the economy. Thus, the author was relevant in understanding the impact of global markets on the interest rates. However, I think that post should have indicated the subject matter and discuss the importance of the ideas on corporate finance. Therefore, the post was appropriate in discussing the subject of the article about the impact of interest rates set by Fed in the economy.