Posted on 01/20/2016 8:49:58 AM PST by Citizen Zed
Well, I guess we can rule out another rate hike in January. That's what economists are saying, not that anyone seriously believed that the Federal Reserve was going to engage in back-to-back hikes after promising that rates would go up only gradually in the months ahead.
With Wall Street off to its worst annual start in history, stock prices have been but one indicator that the economy could slow in the weeks and months ahead. That should give the Fed pause.
Stocks, of course, have not been the only market-based gauge to suggest that both the domestic, and global, economies are weakening appreciably.
Bond market interest rates are moving lower around the world. The yield curve, here at home, has flattened while commodities prices, Tuesday's reflex rally notwithstanding, have fallen to levels associated with a slowdown, or in some cases, recession.
Most important, of late, is that the futures market for the federal-funds rate has begun to "price out" the possibility of another rate hike in March, while some interest rate markets are beginning to "price in" a reversal of the Fed's rate hikes as early as June. I too think the Fed will be forced to send rates back to zero and quite possibly take them into negative territory beginning as early as June.
(Excerpt) Read more at cnbc.com ...
The only arrow they had left in their quiver was to THREATEN to raise rates. Actually DOING it was not a good thing. I am under the impression that they already have undone their raise, just not officially. The rates now are just the “sale price”.
Excellent comment. Nominal price and rates are not the same thing.
Economics won’t be stymied by any agenda. It works regardless, for good or ill.
I’m confused. Two FMOC meetings ago, the fed choose not to raise rates and the market went down because that was perceived as saying the economy wasn’t doing well enough to raise rates. The last FMOC meeting, the fed raised rates and now the market is down because the economy isn’t doing well enough to raise rates?
What am I missing? Other than the fact that no one knows why the market is ever up or down but a lot of people want to go on TV and pretend they do.
When the Fed chose to raise rates, the lemmings decided that it was a sign that the MSM and Administration might not actually be lying to them.
However, the lemmings finally now realize they've been lied to all along.
If the Fed turns around so soon and drops rates, they’re going to look clueless (and the not-so-secret is they are).
That is equally confusing. If the MSM and Administration were pushing a false story of an improving economy, then a Fed rate raise would have been consistent with that story. A failure to raise rates by the fed would have indicated that the MSM and administration were lying.
How do you explain that your story may have been true of the previous FMOC meeting when the feds did not raise rates and the market went down but your story is inconsistent with this last FMOC went the Fed did raise rates?
Wouldn’t do much good to undo it. The bond collapse will eventually happen anyway.
The market has already priced out half of the 25 bp increase.
It was never about saving the economy. It’s about saving the markets.
The Fed is playing a con game it is losing. They are screwed now whatever they do.
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