Posted on 08/17/2016 3:14:45 AM PDT by expat_panama
The Federal Reserve is raising expectations for an interest rate rise this year, even as early as next month, after two policymakers on Tuesday said the economic stars now appear to be aligning despite weak U.S. economic growth in the first half of 2016.
New York Fed President William Dudley said "it's possible" to raise rates at the Sept. 20-21 policy meeting given evidence of wage gains and a tighter labor market that could boost inflation, while Dennis Lockhart of the Atlanta Fed said a hike next month is in play.
The comments, which prompted investors to boost bets on a rate hike...
..."If the meeting were today, I think the economic data would justify a serious discussion" of whether to raise rates now, he said, adding two rate hikes in 2016 is "conceivable."
Dudley's comments were taken as more confident in tone than a speech he gave just two weeks ago. In response, U.S. stock prices slid on Tuesday while interest rate futures markets priced in about an 18 percent chance of a September move by the Fed, up from...
Lockhart said he was not locked in to a particular date to hike but he cited ongoing job gains and "healthy" signs that inflation will pick up as possibly justifying a September move.
Asked about inflation, which has remained below a 2.0 percent target for years, Dudley said the question is whether there is enough economic growth to push up wages and, ultimately, inflation. "So far we seem to be on that trajectory and we'll have to see how it plays out in coming months," he said.
(Excerpt) Read more at reuters.com ...
While yesterday's CPI was anounced as being zero, the final index number was actually lower than last month's and that means we're in deflation.
Of course the Fed prefers the PCE for measuring inflatin and that one's still up reaching for 3 percent. We'll see. The last time the Fed hiked rates was at the end of '15 --it was a microscopic token nudge and it nearly ruined everything.
We are about to find out why carrying debt year after year is a really bad thing.
Happy Mid-Week already and institutions are dumping stocks! Yesterday saw major indexes drop the better part of a % in rising volume and the IBD distribution count just got upped from 4 to 5 for both the S&P and the NASDAQ. Gold and silver are fading back too (now at $1,344.21 and $19.68) although this morning's metals futures are upbeat at +0.87%, as opposed to -0.59% for stock index futures.
Econ stats today: MBA Mortgage Index, Crude Inventories, and FOMC Minutes.
News:
Why America's White Working Class Is Falling Behind - J.D. Vance, NRO
The Sheer Idiocy of Student Loan Forgiveness - Jordan Weissmann, Slate
Aetna's Obamacare Retreat Is More Than It Seems - Megan McArdle, BBW
Obamacare Will Survive Aetna Market Retreat - Editorial, New York Times
Aetna's CEO Predicted Obamacare's Demise 4 Years Ago - Editorial, IBD
Environment Must Be Balanced w/Econ. - Pete Sepp, Washington Times
It May Be Time to Buy Market's Losers - Anthony Mirhaydari, Fiscal Times
Clinton and Trump Bring Back Keynesian Econ - Thomas Donlan, Barron's
Trump Econ Plan Would Make U.S. Less Great - Jeremy Warner, Telegraph
Trump's Plan Could Make Him One of the Best - Uhler & Ferrara, Spectator
What I’m seeing is that the national debt’s not causing the mess (usually heavy fed borrowing makes prices rise) but it’s the symptom of the real problem —namely the gov’t taking over all commerce.
FDR all over again.
Add me please!.....
The Fed has been propping up Zero for 7 + years. Watch as they quit blowing into the balloon if Trump should pull a win out of the hat. They will put interest rates to 3% and 3 months later to 5% and the MSM will blame Trump and the GOP for the devastation the Fed caused.
1. This might be an inevitable consequence (a benefit, in fact) of running up huge trade deficits all over the globe. All of those trading partners with excess dollars have to do something with them, even if it means buying U.S. bonds at ridiculously low interest rates.
2. This also confirms that "financialization" has replaced sound business practices in much of our economy. By this I mean that traditional principles of supply, demand and pricing have been replaced by an approach where using debt to support purchases and inflate asset values has become more important than normal production and consumption.
translation: The REAL polling date shows Trump is going to win. Time to start the self-destruct sequence.
Bush’s Fault morphs into Trump’s Fault, eh?
When all along the game has been to steal as much wealth & viatality as is possible from the working & middle classes and from the savers.
done!
Not that I'm shocked at the thought that the Dems see Trump Era unemployment as being good for them, it's just that it's hard to believe that the Dems are smart enough to think something thru and then work hard to make it succeed.
Is there any chance you could say that using words of one or two syllables?.
...(a benefit, in fact) of running up huge trade deficits...
Benefits from huge trade deficits? I'm shocked. Shocked!
Our economy is now built on using cheap money to drive demand and inflate asset values.
“Our economy is now built on using cheap money to drive demand and inflate asset values.”
More and more of the world’s “wealth” is devolving from tangible asset into a digitally assigned-value entity.
Sort of backwards version of the alchemist’s dream of turning lead into gold.
One problem with your scenario is that since 2008 the reserve requirements on the banks (+Dodd/Frank and Fauxcahontas Lizzy Warren) have been extreme unbelievable, if only to keep rates above zero.
If/when Trump wins, as has been pointed out elsewhere in this thread, 0bama and Co. will open the floodgates and a whole new way of looking at money will emerge, because it will be something that the world has never seen before.
Who are the Feds trying to kid? We were in a deflationary depression.
tricky: they would need to time an event such that the resultant dip would hit the market at the same time as the nov. 8 bounce if trump wins on nov. 7. if it is too early, trump can point to the dip and blame it on the democrats. if it is too late, trump can point to the bounce and blame the democrats. so, the event timing would seem to need to be exact. but the timing of such an event itself would raise suspicions among the less somnambulent voters out there...
i wonder, what is a good investment strategy for the nov. 7 election presuming a trump win? i am spooked and mostly out the market as of now, for generic reasons relating to lack of perceived (by me) stability in the economy in general...
Me too.
This blame game has no basis in what happens, it only depends on the political affiliations of the blamers and the blameees. Remember in 2000 we had a huge stock market crash w/ a Dem and an econ contraction the next year. The Dem blamers said it was all the fault of the Reps. Eight years later we had a stock market crash in '08 and an econ contraction in '09 and once again it was the Reps fault. Yeah, I know the official reciession dates were set up to match the politics but those same official daters were paid off by the Dems too.
Bottom line is that w/ politics we can say anything we want, but w/ money we have to be careful --and not think politcs.
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