Posted on 05/27/2016 4:16:45 PM PDT by Olog-hai
Federal Reserve Chair Janet Yellen said Friday that an interest rate hike would be appropriate in the coming months if the economy keeps improving.
While economic growth was relatively weak at the end of last year and beginning of this year, it appears to be picking up now based on recent data, Yellen said during a discussion at Harvard University.
She said she expects the Fed to “gradually and cautiously increase” its key interest rate “and probably in the coming months, such a move would be appropriate.” …
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Consider this : We have been at artificially low interest rates for years and years. All to stimulate the economy.
A whole generation thinks this is how it is. None recall mortgages/car loans at 10-15%
When I was an econ major, I learned that interest rates, over time, are at about 4 to 5%.
Imagine the brakes on the already weak economy if rates inch up 100% to 1% or 500% to the traditional 5%?
I guess that big GDP correction for the first quarter of 2016 really did the trick.
It went all the way from ZERO.3% to ZERO.8%. A real Barnburner...
My best guess it that they didn’t include all the “Made in America” Donald J. Trump Campaign Gear being sold and the amount of Aviation Fuel it took to keep Trump Force One flying from Rally to Rally.
[if the economy keeps improving]
WHAT economy that keeps improving?
Illegal entry into America? Spending Jeb’s campaign cash?
These are the only growth areas I’ve seen.
Oh, and the Federal debt.
Federal Reserve Chair Janet Yellen said Friday that an interest rate hike would be appropriate in the coming months if the economy keeps improving.
++++
This must be a misprint. I think she meant to say “while we pretend that the economy is improving”.
I’ll be watching for the correction to come through.
Can’t have bronco go out on a low note can they? Smoke and mirrors while we burn.
High interest government debt.
Now that it looks like Trump will be elected she is free to let the economic house of cards collapse and crash the economy
Unlike previous Republicans, Trump is not going to let Yellen and Obama make him the chump that gets stuck with the blame for Obama’s crash of the economy
“A whole generation thinks this is how it is. None recall mortgages/car loans at 10-15%”
Nearly 9% mortgage for me back in the 70s.
I’ll be shocked to earn interest on my savings. I’ve forgotten what that’s like.
I’ve been watching this stuff for 40 years and this situation is pathetic.
This country desperately needs a strong economy that grows at an average of around 3.5% a year or more and that means less govt interference.
No one in Washington has the guts to say or admit that.
I don’t understand all the details. But could it be
1) We have to sell LOTs of debt each month ($50-$100 billion)
2) Not enough buyers want to purchase our debt at current rates
3) They can’t do another round of “quantitative easing” because everyone just attacked Trump for talking about “printing money” and he’d make them look like fools when he points out that is what a big part of “quantitative easing” is/was.
4) To avoid looking like fools now and admitting that the deficit matters they’ll sell debt at a rate we can’t afford to repay in the future.
3.5% growth would be okay, if the government portion of the economy was back in 1970’s levels, around 25-30% of GDP. As long as government spending is at current levels of GDP, we would need 4.5 to 5.0% “growth” to make it a strong economy.
Prime rate; Lending rate for a banks strongest customers. Rate tends to move in concert with inflation.
1950 - 3%
1960 - 5
1970 - 6
1980 - 21 (!) (Paul Volker killing inflation brought on by Carter)
1990 - 9
2000 - 7.5
Today - 3.5
Historically growth is impeded by higher rates and encouraged by lower rates. Not any more. Low rates can’t overcome excessive govt regulation now.
Obama is going to leave the American economy a huge disaster perfectly timed to explode shortly after Obama leaves office for the next President to have to deal with
Right now, Obama and Yellen executing a propaganda charm offensive to convince America that the economy is booming so he can point fingers at the next President and play the blame game to blame the. new President for Obama’s destruction of the company
http://www.usgovernmentspending.com/past_spending
Although spending dropped back to 21 percent of GDP immediately after WWII, it steadily climbed thereafter until it hit a peak of 35 percent of GDP in the bottom of the recession of 1980-82. Thereafter government spending chugged along in the mid 30s until the mortgage meltdown of 2008. In the aftermath of bank and auto bailouts, government spending surged to wartime levels at 41 percent of GDP. The mortgage emergency seems to have ratcheted out-year spending up a notch. Near term government spending in the future is pegging at 36 percent of GDP.
And monkeys could come flyin’ outa my ...
Not going to happen.
what tea leaves is she reading ?
the last durable goods report was mostly airplane buys.
Take out airplane buys and durable goods orders in general was almost non-existant.
I remember so well those high rates, which were good if you had saving account or certificate of deposit way back when. I remember early 80’s the interest rate for a short term CD (6 mos or 1 year) at my bank in NYC was 14% for all customers.
Not until I close on my house, please.
The rate will go up, when the bond collapse begins, not long before repudiations of debts.
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