Posted on 09/17/2015 11:22:51 AM PDT by freddy005
With a 54-0 record without a rate hike (better than Floyd Mayweather's), and 58 Economisseds expecting no change, 3 a half-pregnant 13bps hike, and 53 expecting a 25bps hike, The Fed was always going to break someone's heart today. Bond yields and the USD were tumbling into the decision, which appeared correct as The Fed chickened out again...
**FOMC: NO POLICY CHANGE, 0-0.25% TARGET 'REMAINS APPROPRIATE' **FOMC: GLOBAL ECON,FIN EVENTS 'MAY RESTRAIN ECON ACTIVITY' **FOMC: VOTE 9-1; LACKER DISSENTS, WANTED 25 BPS HIKE Given the "no hike", it is clear that, as we noted, Goldman is still in charge and Hilsy is still leaker-in-chief. All eyes now on the dot-plots as The Fed desperately tries to regain some credibility, stifle uncertainty, and calmly reassure markets that "we've got your back."
Pre-FOMC: S&P Futs 2000.5, 10Y 2.26%, 2Y 77.5bps, EUR 1.1330, Gold $1118
Additional headlines include:
**FOMC LOWERS L-RUN EQUILIBRIUM FFR EST TO 3.5% V 3.8% JUNE **FOMC: 11 PARTICIPANTS SEE FFR BELOW 0.5% END 2015 VS 7 JUNE **FOMC: ECON WILL EXPAND MODERATE PACE W/ 'APPROPRIATE' ACCOM *FOMC: LABOR MKT IMPROVED,'SOLID' JOB GAINS, UNEMP DECLINING *FOMC: ONE PARTICIPANT SEES NEGATIVE FFR END-2015 & END-2016 *FED: MKT-BASED MEASURES OF INFLATION COMPENSATION MOVED LOWER
Continue...link http://www.zerohedge.com/news/2015-09-17/fed-chickens-out-again-fails-raise-55th-consecutive-time
(Excerpt) Read more at zerohedge.com ...
Not to mention the decline over decades in the value of the dollar against other world currencies...
Guess all it took was for China to catch a cold...
BTW, who whose face should be on $10?
They HAVE TO.
If they raise interest rates then IMO the rate they pay on the national debt goes up and we see an addition 400 billion in a little move on interest rates.
The economy must REALLY be doing well... /sarc
Once interest rates go up, the debt servicing costs for the USG will rise and the prices of houses will decline.
The “Money Bubble” is balanced on the razor’s edge....
The Federal Reserve does influence rates. But their decision was completely appropriate given the weak jobs data.
Federal Reserve Act
Section 2A. Monetary policy objectives
The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.
There's no way outta' here
If they raise rates the dollar is stronger and hurts American businesses. With China devaluing their currency slightly, the last thing that we need is for the dollar to get too strong.
Maybe when Trump gets too close to the nomination the fed will raise rates 1% or something to scare Wall Street. They’ll blame it on Trump. The Trump crash of 2016.
Geez that gobbletygook makes me feel like a maroon.
I agree. I wouldn’t blame the Fed for this.
Aw, c'mon, get with it, it was FAR MORE important to ask about whose portrait should go on the new $10 bill, and what they wanted their SS codename to be....
A raise in rates would trigger the interest rates derivatives.
While not immediately hurting consumers, this trigger is much, much, much bigger than the national debt!
You would see banks and large financial institutions go under in a flash... and all those insured, WOULD NOT BE BAILED OUT, they would end up with higher interest rates anyways!
isn’t the dollar relatively strong at the moment? (only b/c the others are worse off....certainly dollar is strong against Euro, and against Canadian dollars...). or am I missing something?
The best time to buy a house is when interest rates are high. The reason is simple:
People don’t buy a price. They buy a mnthly payment. When rates are high, home prices are low. When rates then go down, prices go up AND you can refinance. Both put the homeowner in a better position.
BTW, if the FED had increased the rate, the veil would have been lifted and t would have been obvious what kind of shape our economy is REALLY in. The house of cards would have collapsed.
The national debt is driven by the entitlement costs. The ceiling must be raised as a result. 71% of the budget is on automatic pilot. With 10,000 baby boomers retiring every day for the next 20 years, the entitlement costs will rise regardless. 40% of all Medicare expenditures come from the General Fund.
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