Any doubts over about December Fed hike may be swept away

in.reuters.com ^ | Jonathan Cable

[BenLurkin]

While most U.S. data has been relatively upbeat, retail sales rose less than expected in October, suggesting a slowdown in consumer spending that could temper expectations of a strong pickup in fourth-quarter economic growth.

In the meantime, Britain's Bank of England was once pegged as likely to be the first major central bank to tighten policy but prices fell again last month, data will probably show on Tuesday.

With inflation so far below its 2 percent target the BoE's Monetary Policy Committee won't be raising its benchmark rate from a record low 0.5 percent until at least April, a Reuters poll found, putting it several months behind the Fed. [ECILT/GB]

British retail sales numbers on Thursday will offer clues as to how consumers are faring.

"While inflation looks odds on to post its lowest rate since March 1960, we do not think this decline will worry the MPC too much, with weak price pressures driven largely by lower energy prices rather than domestic economic weakness," wrote Ruth Miller at Capital Economics.

ASIA

No change in policy is expected from the Bank of Japan on Friday but it could ease monetary policy further early next year, according to nearly half the analysts surveyed by Reuters, as consumer prices fall short of central bank forecasts. [ECILT/JP]

GDP data on Monday will probably show Japan fell into a technical recession in the third quarter, maintaining pressure on the BOJ and Prime Minister Shinzo Abe to support the world's third largest economy.

[grania]

You're economic theory would work just fine if the Fed didn't continually provide bogus money and increase the debt instead of paying interest to savers for borrowing their accumulated savings.

Doesn't it bother you just a little that the bankers and others who created the financial mess keep getting their six-figure salaries and bonuses while average folk get NOTHING?

[fortheDeclaration]

No, it is savings that are good for the economy not spending.

Savings lead to investment and production.

The Keynesian's are substituting low interest rates for real savings, which results in inflation, not production and a 'boom-bust'.

[fortheDeclaration]

Yes, it is based on some bizarre reasoning!

[CodeToad]

“If nobody is out there clamoring to borrow your money, then you aren’t going to get much interest on it. “

The problem is the government (the Fed) has become the source of lending instead of savings account holders. They can generate billions on command while your savings are trivial in comparison.