The answer to both questions is no. It is clearly wrong to raise interest rates while the greenback keeps rising, and while the weak economies and political instabilities in the rest of the world are likely to strengthen the demand for dollar-denominated assets.
There is also no evidence of an accelerating U.S. economy giving rise to underlying inflation pressures. Our economic growth in the first three quarters of this year (2.6 percent) is almost identical to the growth rate in the same period of last year (2.4 percent).
Similarly, over the same period, the growth of hourly compensations in the non-farm business sector was up 2.2 percent, compared to 2.7 percent in 2014. The growth of unit labor costs also slowed down to 1.6 percent from 1.8 percent last year.
And to top it all off, the U.S. consumer price inflation has been flat or negative in the first ten months of this year, compared with 1.5-2.0 percent inflation rates in the same period of 2014. Yes, most of our good inflation numbers is owed to tumbling oil prices, but that story is not over yet. Whatever competition they might be fighting, the Russians and the Saudis are still making money at $50/barrel, because their (onshore) marginal production costs are $18 and $3 per barrel respectively. Also, the Russians may be bombing to smithereens the Islamic State's black market for Iraqi and Syrian oil, but Iran is coming on stream.
I see no compelling domestic or international reasons for the Fed to rush into an imminent tightening of money market conditions in the United States. And, as of this writing, I see no indication that the Fed is moving in that direction.
Many people seem to believe that the Fed's rate hike is part of an impending market doom. Perversely, the doom sells. In some European countries, it is even fashionable. Some of these countries have built a prosperous financial industry by peddling doom and offering puny returns to their frightened customers.
I remain bullish on U.S. equities. Slowly growing labor costs in an expanding and amply liquid economy will continue to widen profit shares. America's world beating companies are some of the best and safest bets around.
Michael Ivanovitch is president of MSI Global, a New York-based economic research company. He also served as a senior economist at the OECD in Paris, international economist at the Federal Reserve Bank of New York and taught economics at Columbia.