Despite the stock market’s return to triple-digit gains on Tuesday in apparent response to signs that China will take steps to stimulate its economy, bankers worldwide are warning a decision by the Federal Reserve to increase interest rates next week could precipitate a stock-market collapse. Deutsche Bank, the European Union’s biggest bank, has grabbed attention by issuing a warning to the Federal Reserve that a rise in U.S. interest rates now would constitute nothing less than a “premeditated controlled demolition” that could cause global stock markets to collapse a dramatic 40 percent.
The Federal Reserve is scheduled to decide during the Federal Open Market Committee meeting scheduled for Sept. 16-17 whether to raise interest rates this year. Various Federal Reserve board members have indicated that the drop in unemployment to 5.1 percent announced last week was “good enough” to suggest the U.S. economy is growing once again. The sign of growth triggers Fed fears of a 2 percent inflation rate unless interest rates are raised soon. FULL REPORT