Posted on 12/14/2016 11:32:55 AM PST by RummyChick
Federal Reserve officials, amid signs that the U.S. economy soon could shed its long period of stagnation, approved the first interest rate hike in a year Wednesday and said it foresees three more increases next year.
The stock market reacted calmly, while the dollar and bond yields rose.
(Excerpt) Read more at cnbc.com ...
I’m okay with the hike. Been a long time coming.
/echo
It’s actually a good thing. Rates have been held low too long. There are negative consequences from that too.
We should have had a lot more price inflation, but the only thing that actually inflated was the stock market. And now, with a very weak economy, interest rates are increased. At a time, I might add, where there is a lot of credit already out there. I saw low rates coupled with QE as kicking the can (total economic collapse) down the road. I see any significant rate increase as flirting with finding the end of the road.
Oh, and I refinanced my home and property two months ago in anticipation of this. So yeah, I kinda saw it coming myself. It’s because it was a foregone conclusion that Trump would win and I figured the political organization would try to spite him. That may not be the reason they did this, but I think it is a major part of it.
The real reason the Fed kept rates at zero is the gigantic federal deficits 0bama has been running annually, and the doubling of the debt under his watch. The Treasury can’t afford to finance the debt unless the money is free.
They are deliberately tossing a fiscal grenade in Trump’s lap as 0bama scoots out the door.
Trump wanted this. No more free money. Glad it’s finally starting.
This has the potential to get really ugly pretty quick.
Yes she has a little over two years to go.
Yellen is one vote out of ten. By all accounts she has favored raising interest rates for some months now.
“the economy is not as strong as they say it is and a rate increase will damage “
A primary reason the economy is not strong is that the rates are artificially kept low. Who the heck wants to invest in a zero return market??
Definition of insanity is doing the same thing over and over again (keeping rates low) and expecting different results (economy getting better).
A little over one year to go...
LOL. Interesting how some people view these things. The market is at an all high high after day after day of increases and is down less than 1%. So yes ... the market reacted calmly to the news because the market had been expecting the increase for months. Just another day for this long term investor.
I don’t see why it would have.
They had the same policy goals, and were both on the same lo-estrogen managed 28 day cycle. How would that spell change or improvement? /s
Smirk
It’s down less than 50 points on the news. The market doesn’t over-react...but the hysterical news media always does.
The inevitable reckoning of the debt and zero interest rates was just a question of timing. If Hillary won, rates would stay near zero her entire term. BUT, since Trump won, may as well dump it on his lap. It will be painful for a while. But if he truly passes pro growth pro private enterprise reforms and policies we’ll be sitting pretty in a couple years.
I fully expect the MSM to take interest in the “plight of the homeless” soon.
Don't you think the range for oil prices over the next year will be between $40-$60 a barrel? It's about $50 now, isn't it?
With 90 million not working, open borders and our industrial base gutted there is not much a chance of wage induced inflation. If anything higher interest rates may dampen consumer spending and push prices lower.
that little 50 points you are talking about made me a huge amount of money on the futures swing..and I only played it one way. the gyrations have been huge. So no, it has not been a calm reaction in the futures market.
Oil futures stabilized. Emini and gold have not stabilized.
“Wonder if they were holding rates low to make Obama look good? “
This was kind of like keeping the choke wide open to keep an engine running as your fuel is garbage. Now we have some good fuel and it’s time to shut the choke a bit so the engine does not rev to wide open throttle.
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