Federal Reserve Won’t Raise Rates in September Amid China Worries

The global markets selloff takes a September rate hike from the Federal Reserve off the table, according to one economist. 'I've been reluctant to see the Fed hiking this year and I think [the markets selloff] moves September off the agenda,' said Simon Smith, chief economist at FxPro, based in London. Short-term interest rates have remained near zero since December 2008. The central bank is looking for a window to hike rates. But one school of thought says the Fed should move interest rates up in September so it has the ability to lower rates down the road, should global economic conditions worsen. With interest rates close to zero and the Fed having already injected trillions of dollars into the U.S. economy, the central bank is out of tools to fix future economic woes. But Smith doesn't think conditions will worsen to the point where the Fed needs to consider negative interest rates in an effort to boost growth. 'The world isn't falling apart - China is having a wobble in a growth slowdown, which has been underway for some time.' TheStreet's Scott Gamm reports from New York.