Thoughts on the Fed Rate increase?

[doneat54]

Now almost exactly one year out from FIRE, I would just LOVE to see my investments do SOMETHING. Seems they have been stuck in neutral for what, 4-8 months? I hear a lot about the Feb interest rate increase (newswires today) and generally feel that it will be a good thing, and a sign that the economy has truly "turned the corner". I have been somewhat eager about this day... but I also still see a lot of skittishness in the global economy. Love buying gas for under $2/gal too, but also know there are consequences to that as well.

What are the forums thoughts on the effect of the fed interest rate raise and the outlook for 2016?

 

[HFWR]

Aside from some temporary wailing and gnashing of teeth, I expect the eventual rate increase to be a non-event.

As for prognosticating the market in 2016, or any year, I have no idea. I don't, however, see a catalyst for big gains...

 

[Jack_Pine]

I'm just glad they are finally doing it (I think). The specter of it hanging out there has been worse than what I believe the actual event will be.

Seem like every time she opened her trap about a possible rate hike the markets would tank. Guess now she can talk about how many times it will be raised in the future and at what frequency.

 

[Running_Man]

There is no way to know what is going to happen because it is expectations that drive markets and years of zero interest rates and now there is an interest rate causes changes in expectations

 

[Christine]

So it's up. Can't wait until our europeean banks do the same.

 

[dtbach]

It's about time. Should have been done a year ago. I'll breath a sigh of relief when they finally get it back to 3-4%.

 

[Dash man]

One thing for certain...markets will be volatile for the foreseeable future.


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[dtbach]

One thing for certain...markets will be volatile for the foreseeable future.


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like they have been in the past and will always be. . . . . .

 

[Mulligan]

Wells Fargo just announced they will not increase deposit rates...But hey, they did immediately raise the prime rate though. I guess we know who profits from the rate increase.


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[Hamlet]

It's about time. Should have been done a year ago. I'll breath a sigh of relief when they finally get it back to 3-4%.

Anyone want to bet that we'll see zero again before we see 3% ?

 

[Mulligan]

Anyone want to bet that we'll see zero again before we see 3% ?

I will take the near layup bet... And the quicker they try to raise it, the better the odds it happens


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[HFWR]

Market is reacting positively, so far...

 

[Senator]

It's only .25%, but longer term higher interest rates will be bad.

The USD will get stronger. Oil will get cheaper. Consumer prices will come down further. Jobs can be done overseas for less money. Bonds will be worth less. International stocks worth less.

And consumers will see an extra .01% in their savings accounts...

 

[Big_Hitter]

thoughts? meh non-issue

 

[Ed_The_Gypsy]

like they have been in the past and will always be. . . . . .

Nonono! This Time It's Different! <vbg>

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[cyber888]

No one except the Banks will benefit from the rate hike. All banks are going to increase their lending rates, and no one will increase their savings rate or their CD rate. The owners of the big rich banks are very happy. As usual, consumers with high debt are in the poor house.

 

[audreyh1]

Anyone want to bet that we'll see zero again before we see 3% ?

Me.

 

[mathjak107]

Most fund family's were paying the fees on their money market funds.

The increase will just go to support the fund expenses.

 

[jim584672]

Wells Fargo just announced they will not increase deposit rates...But hey, they did immediately raise the prime rate though. I guess we know who profits from the rate increase.


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Who profits? Preferred stock holders.

 

[ejman]

Me.

Me +

 

[GravitySucks]

No one except the Banks will benefit from the rate hike. All banks are going to increase their lending rates, and no one will increase their savings rate or their CD rate. The owners of the big rich banks are very happy. As usual, consumers with high debt are in the poor house.

So load up on Bank Equities.

 

[calmloki]

Pretty sure some starlet with a wardrobe "malfunction" or a white college girl disappearing on an island holiday or some nutbag with a gun killing three in a MickyD 'cause he didn't get a toy with his kiddymeal will have as much effect. Or maybe it all depends on the gravity or breathless urgency with which things are reported.

From a personal standpoint, signing up for a CapOne Spark card a month ago, spending $5021 on it, and crediting the account with $598 in bonus and 2% cashback today had a much bigger effect. Pretty shortsighted though, just not focused on the big picture I guess.

 

[nash031]

Now almost exactly one year out from FIRE, I would just LOVE to see my investments do SOMETHING. Seems they have been stuck in neutral for what, 4-8 months?

I'd almost prefer they not do anything or even go down rather than go up a bunch before I pull the plug. JMO. AFTER I'm out, yeah, a nice 30% year would be swell!

 

[RAE]

Anyone want to bet that we'll see zero again before we see 3% ?

Yep, that is my guess as well. There was really no justification for this increase, other than the fact that they've been talking about doing it for a long time. Inflation is non-existent (the way they measure it, anyway), and although unemployment has decreased, wages are still basically flat.

 

[tmm99]

Can you someone explain to me why the market will be more bumpy because of the interest rate hike (which I heard people say more than a couple of occasions)?