Bernanke's prediction on %

[ronin]

Said today, when asked for a prediction on where interest rates are heading, that they could be at 6% by 2016. Not clear if he's talking short term or long term rates.

(see the 9:36 am entry)

bernankes-second-day-of-testimony

 

[hsv_climber]

Reader notes that I was incorrect in my report on the interest rate question. Rep. Mike Fitzpatrick, Republican of Pennsylvania, had asked Bernanke when the unemployment rate would fall to 6%. Bernanke said 2016. He wasn't talking interest rates.

...

 

[REWahoo]

Said today, when asked for a prediction on where interest rates are heading, that they could be at 6% by 2016. Not clear if he's talking short term or long term rates.

(see the 9:36 am entry)

bernankes-second-day-of-testimony

The 9:36 entry has apparently been deleted...

 

[REWahoo]

...

hsv, who are you quoting in your post #2 above?

 

[hsv_climber]

hsv, who are you quoting in your post #2 above?

Quote was from the actual article (i.e. from the OP's link).

 

[Bikerdude]

Said today, when asked for a prediction on where interest rates are heading, that they could be at 6% by 2016. Not clear if he's talking short term or long term rates.

(see the 9:36 am entry)

bernankes-second-day-of-testimony

Never mind.

 

[bondi688]

If unemployment rate will really drop to 6% in 2016, the voluminous additions of liquidity with so many QEs will likely have a rather large impact on inflation and interest rates at that time.

 

[heirloom]

If unemployment rate will really drop to 6% in 2016, the voluminous additions of liquidity with so many QEs will likely have a rather large impact on inflation and interest rates at that time.

Ben said this won't happen. When he starts to increase int rates, he will do it slowly so inflation won't occur.

 

[obgyn65]

Why would we trust or even pay attention to what the Federal Reserve Bank says ?

 

[steelyman]

Why would we trust or even pay attention to what the Federal Reserve Bank says ?

Because it impacts our investments. Not everyone stays curled up in a fetal position.

 

[obgyn65]

For years, until 2008 of course, they said there was no real estate bubble. Should we have followed their advice then ?

"We run the risk, by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand," Greenspan said about the housing bubble, according to the transcripts of a March 2004 meeting.

Because it impacts our investments. Not everyone stays curled up in a fetal position.

 

[MichaelB]

The reason people listen to Chairman Bernanke is that, as investors, they are looking for an edge, and even though he's not going to give them one, hope springs eternal.

 

[steelyman]

The reason people listen to Chairman Bernanke is that, as investors, they are looking for an edge, and even though he's not going to give them one, hope springs eternal.

You got that right. Enough said!

 

[audreyh1]

The reason people listen to Chairman Bernanke is that, as investors, they are looking for an edge, and even though he's not going to give them one, hope springs eternal.

 

[ls99]

If Bernanke would be as clear and concise as Greenspan was, could really get an edge.

 

[Khufu]

If unemployment rate will really drop to 6% in 2016, the voluminous additions of liquidity with so many QEs will likely have a rather large impact on inflation and interest rates at that time.

Ignoring the fact that all the QEs so far have had zero effect on inflation. But, next time for sure, because it must happen, right?

 

[HighRoller]

IMHO, no matter if you are a conservative or an aggressive investor, and no matter if you agree or disagree with Bernanke, I think you should probably at least listen to what he is saying/doing so you can make better informed decisions on your own financial strategy.

 

[rbmrtn]

IMHO, no matter if you are a conservative or an aggressive investor, and no matter if you agree or disagree with Bernanke, I think you should probably at least listen to what he is saying/doing so you can make better informed decisions on your own financial strategy.

+1. It's not about getting an edge on anything, but getting in sync with what the FED is doing. As Marty Zweig said "Don't fight the FED".

 

[bondi688]

Ignoring the fact that all the QEs so far have had zero effect on inflation. But, next time for sure, because it must happen, right?

There is no inflation? My trips to the grocery stores and gas stations every week say otherwise. Airfares have gone up a fair bit. The recent pop up of housing prices will exert upward pressure on cost of living as well.

 

[youbet]

There is no inflation? My trips to the grocery stores and gas stations every week say otherwise. Airfares have gone up a fair bit. The recent pop up of housing prices will exert upward pressure on cost of living as well.

There's no inflation if you take advantage of the rebates being offered by the Administration. Just send receipts marked up to show higher fuel, food or other prices to Washington and they'll gladly send you a check to offset the increases you are seeing.

It isn't as convenient as having prices stay level, as advertised, but as long as you can handle the 2 - 3 week turn-around time to get your check, it works out OK.

 

[Khufu]

There is no inflation? My trips to the grocery stores and gas stations every week say otherwise. Airfares have gone up a fair bit. The recent pop up of housing prices will exert upward pressure on cost of living as well.

You response demonstrates that you don't understand what inflation is:

1. Food costs for American hardly matter in the big picture since food would be 5% to 8% of a normal household budget. People focus unreasonably on food when thinking of inflation because they make many more food purchasing decisions in a month than, say, rent. Rent is likely to be 30% of a household budget. Your rent hasn't gone up or you would have complained about that first.

2. Airfares are up because of high fuel prices and low traffic has caused airlines to cut back on flights. Since such increases are not across-the-board, it is not inflation which is due to a change in the value of money and everything it buys.

 

[bondi688]

You response demonstrates that you don't understand what inflation is:

1. Food costs for American hardly matter in the big picture since food would be 5% to 8% of a normal household budget. People focus unreasonably on food when thinking of inflation because they make many more food purchasing decisions in a month than, say, rent. Rent is likely to be 30% of a household budget. Your rent hasn't gone up or you would have complained about that first.

2. Airfares are up because of high fuel prices and low traffic has caused airlines to cut back on flights. Since such increases are not across-the-board, it is not inflation which is due to a change in the value of money and everything it buys.

My rent certainly had gone up, 5% a year in the last 2 years. Did not include it because I think mine was still lower than the average rent in the city.
I certainly saw a decrease of the value of the dollar and a lot of things it buys. I cannot say everything, because I do not buy everything. So if the increase in price of food, fuels, good and services are not inflation, what would need to happen before you think there is inflation?

 

[Khufu]

My rent certainly had gone up, 5% a year in the last 2 years. Did not include it because I think mine was still lower than the average rent in the city.
I certainly saw a decrease of the value of the dollar and a lot of things it buys. I cannot say everything, because I do not buy everything. So if the increase in price of food, fuels, good and services are not inflation, what would need to happen before you think there is inflation?

I would expect to see the CPI go up more than the 1.6% it reported for the 12 months ending. I would expect a rise in CPI to be accompanied by a rise in GDP, which showed a growth of only 0.1% for Q4 2012. And I would expect that increase in inflation to be reflected in a rise in the interest rate demanded by buyers of US Treasury Bonds, which however remain near historic lows.

Now, it could be that a government conspiracy is jiggering all those numbers to hide the true inflation, but it would take more than some online forum user's impression of food prices to persuade me of it.