Fed rate hike could be disastrous for US consumers

IN the early hours of Friday morning, traders around the world will know the outcome of one of the most anticipated US Federal Open Market Committee (FOMC) meetings in recent history.

Those who think the FOMC will not raise rates at that meeting point to the chaos that higher interest rates will wreak on volatile and nervous equity markets. This is the majority view - the Federal funds futures market, for example, is predicting only a 32 per cent chance that there will be liftoff this week versus 62 per cent that it will be postponed to December.

Those who favour rates being raised this week have said the Fed's man…