- Markit
US manufacturing sector lost some steam in December, as both Markit's and the Institute for Supply Management reported a decline in business activity. According to the ISM, manufacturing PMI came in at 48.2 last month, down from 48.6 in November, whereas economists had predicted the gauge to rise to 49.0. At the same time, the final PMI reading from Markit dropped to 51.2 during the last month of 2015, down from 52.8 in November. Manufacturers continue to struggle with a strong US Dollar, slowdown in China, as well as volatile stock market.
Meanwhile, Fed Vice Chairman Stanley Fischer said the Fed's tool kit proved to be successful in raising the benchmark federal-funds rate after the December decision to hike rates from zero. Fischer highlighted that officials are ready to consider changes should problems arise. The US central bank in mid-December decided to raise the fed-funds rate to a range of 0.25% to 0.50% after keeping it near zero for seven years. There were some concerns about Fed's ability to hike rates, but the fed-funds rate moved into its new range the day following the Fed's decision. Fed policy makers project that they will further raise the target range by a full percentage point over the course of the year, to 1.25%-1.5%.
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