No Rate Hike: Federal Reserve Stands Pat, Cites Growth Headwinds

No rate hike - that’s the message from the Federal Reserve, following its closely watched September meeting. ‘I think the markets will go through a period of digestion, thinking through what this [no rate hike signal] says about earnings growth in the fourth quarter and earnings projections for next year,’ said Nick Colas, chief market strategist at Convergex. ‘We haven’t really had any revenue or earnings growth in all of 2015.’ Some say the Fed’s latest move is a signal the economy isn’t quite yet ready to stand on its own two feet without the help of the central bank. Critics of the Fed say crisis-level interest rates are no longer necessary. The Fed acknowledged global economic headwinds, which have taken shape in recent weeks. ‘Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term,’ the statement said. Though David Lebovitz, global markets strategist at J.P. Morgan Funds, doesn’t think the Fed was solely referring to the weakness seen in China in recent months. ‘I think they are talking about emerging markets broadly,’ Lebovitz said. ‘Clearly they are very concerned with the developments relating to inflation. We need to see some stability there particularly in terms of inflation expectations in order for the Fed to be comfortable hiking rates next year.’ TheStreet’s Scott Gamm reports from New York.