We noticed yesterday that several money funds were having trouble reporting their latest daily assets or nightly rate files. But we weren't sure what was happening until we say the WSJ story, "A New Computer Glitch is Rocking the Mutual Fund Industry. It says, "A computer glitch is preventing hundreds of mutual and exchange-traded funds from providing investors with the values of their holdings, complicating trading in some of the most widely held investments. The problem, stemming from a breakdown early this week at Bank of New York Mellon Corp., the largest fund custodian in the world by assets, prompted emergency meetings Wednesday across the industry, people familiar with the situation said. Directors and executives at some fund sponsors scrambled to manually sort out pricing data and address any legal ramifications of material mispricings, those in which stated asset values differed from the actual figures by 1% or more." It adds, "A swath of big money managers and funds was affected, ranging from U.S. money-market mutual funds run by Goldman Sachs Group Inc., exchange-traded funds offered by Guggenheim Partners LLC and mutual funds sold by Federated Investors. (Note: Federated money funds weren't involved though.) Fund-research firm Morningstar Inc. said 796 funds were missing their net asset values on Wednesday." In other news, the stock market slide has thrown into even more doubt the liftoff for interest rates. Reuters, reported "An interest rate hike next month seems less appropriate given the threat posed to the U.S. economy by recent global market turmoil, an influential Federal Reserve official said on Wednesday. In the clearest indication yet that fears of a Chinese economic slowdown could influence U.S. monetary policy, New York Fed President William Dudley said the prospect of a September rate hike "seems less compelling" than it was only weeks ago. Dudley, a dovish policymaker and close ally of Fed Chair Janet Yellen, however left the door open to raising rates for the first time in nearly a decade when the U.S. central bank holds a policy meeting Sept. 16-17.... [A]n initial rate hike "could become more compelling by the time of the meeting as we get additional information on how the U.S. economy is performing and (on) international financial market developments, all of which are important to shaping the U.S. economic outlook," he said." The Wall Street Journal writes, "Atlanta Fed's Lockhart Says Fed Is Still on Track to Raise Rates This Year." It says, "Federal Reserve Bank of Atlanta President Dennis Lockhart stuck to his guns Monday, saying he still expects the U.S. central bank to raise short-term interest rates in the next few months, even as he acknowledged stresses facing the U.S. economy and financial markets were making the outlook less certain. "I expect the normalization of monetary policy -- that is, interest rates -- to begin sometime this year," Mr. Lockhart said. "I expect normalization to proceed gradually, the implication being an environment of rather low rates for quite some time," he said."
