Skip to comments.Fed Officials Worry Interest Rates Will Go Up, Only to Come Back Down
Posted on 12/13/2015 1:51:46 PM PST by BenLurkin
Federal Reserve officials are likely to raise their benchmark short-term interest rate from near zero Wednesday, expecting to slowly ratchet it higher to above 3% in three years.
But that's if all goes as planned. Their big worry is they'll end up right back at zero.
Any number of factors could force the Fed to reverse course and cut rates all over again: a shock to the U.S. economy from abroad, persistently low inflation, some new financial bubble bursting and slamming the economy, or lost momentum in a business cycle which, at 78 months, is already longer than 29 of the 33 expansions the U.S. economy has experienced since 1854.
(Excerpt) Read more at wsj.com ...
Raising interest rates is only a ploy to give SOME SORT of room to drop rates once again.
I've watched the economic calender for months, 8 of 10 reports have been negative/heading negative or unexpectedly negative for months.
Folks...we’re being deceived by our own gubbamint.
We have been in the great recession for every one of those 78 months.
Labor participation is at a low, We have not managed two add a single manufacturing job in years, and all of the new service jobs have gone to immigrants, legal and other.
As long as they come down before four hours is up, I don’t see a problem. Obama’s economy is really goofy anyway.
and my bladder might explode IF I go to sleep- therefore I have sworn off sleeping
20 years ago I took out an insurance annuity. It had a provision that it would never pay lower than 3%. I laughed at the time, because regular bank money market rates were about 8%.
Now, I am elated every year when I get my annual statement. The annuity averages about 4% return. My money market account it currently paying about 0.75% return.
Borrowers benefit from the low rates.
Savers get shafted from the low rates.
Of course, with folks who had money, they made out like bandits with the 18% bank interest.
I know nothing. But neither do the ones who messed up the economy!
If rates creep up to that point retirees need to grab some 10 year CDs cause I expect will go to zero again.
No it’s not zero rates. It’s the Fed trying to manipulate economic activity and behavior. Which is not what it’s mandate is supposed to be. The chickens are coming home to roost an the fed with easy money policy as in Quantitative easing has run out of options. Raising rates in a global recessionary environment is al;l window dreassing. Man we are all in a world of hurt.
I can almost promise them they will be back at zero real quick. Raising now as we move into what is likely a deflationary depression is not wise.
I do not understand why no one is campaigning against what a mess the Federal Reserve has made of the economy.
They want to raise now to get the ARM’s to reset higher, then go back down.
Way to go on the economy bath house Barry!
Rand Paul and Cruz are the only ones campaigning on auditing the Fed. Paul is but an echo in the wilderness now given that Trumpo has sucked the air out of the room. We are in the Kardashian era and Trump wether we like it or not is a man of his time. Pure celebrity candidate and all the issues that need to be addressed are not being discussed. I think Trump has stirred the hornet’s nest in a good way but in principle I don’t think he will move the needle when the time will come. Cruz IMHO is the man that poses the greatest thread to the stated order in politics today.
I have had an ARM on my loan for 13 years. Its never been higher than 3%. It adjusts annually in May. So if they want to raise the rate in Dec or Jan I figure it will be back down by May. :-)
Zero, or near zero, interest rates are nothing less than theft and wealth redistribution.
It steals value from savers, gives low cost or no cost loans to banks and select borrowers and artificially inflates the stock market to the benefit of stock owners, investors and speculators.
Savers actually lose value in the process.
As inflation devalues the purchasing power of the dollar the value of their savings decreases without interest as an offset.
I don't know who else "we" might mean to you, but to me it means the economy of the United States of America.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.