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Old 09-15-2015, 07:52 AM   #21
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They will do nothing right now. When they eventually do a 1/4 point raise, the markets will be down 3-4% that day.
I'd rather see them do that and get that out of the way..................
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Old 09-15-2015, 08:03 AM   #22
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Originally Posted by Htown Harry View Post
Prediction: no change.

I have a hard time reconciling the arguments to "get it over with" or "the markets need it" with the Feds' mission of inflation-fighting and low unemployment. I think the FMC will, too.
I always found it puzzling that it is called the "dual mandate" when the statute passed by Congress in 1977 had THREE mandates -"so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates"

The Federal Reserve open market committee in 2012 declared that "stable prices" = 2 percent inflation annually and that the long run normal rate of unemployment was 5.2 to 6 percent. We are at 5.5 percent on unemployment and prices definitely are stable, but long term interest rates are low not moderate. As there is the goal of keeping long term rates at moderate levels, not all time low levels it seems to me there are no reasons within the Feds stated goals for keeping short term interest rates at zero, so therefore they should raise short term rates.

I predict they will raise rates 1/4 percent and reverse themselves in short order as they really are afraid not of a interest rate hike effecting their mandate but the unseen monsters they have created with zero interest rates on the global scale. When the monsters begin to reveal themselves the FED will hid behind zero interest rates once again.
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Old 09-15-2015, 08:22 AM   #23
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I'd rather see them do that and get that out of the way..................
The ONLY reason for the Fed to raise interest rates is to increase profits for their member banks. The banks have loaned a lot of money on ARMS and HELOCs. If the rate raises, the banks make Billion$$ when the rates get adjusted. The banks basis and interest rates are the same, the borrower pays more.

I have no doubt that plays a larger part of the hidden equation than any 'mandates' given by congress. Bank CEOs need bonuses too. Just as you and I enjoy our dividend checks, the CEOs do too.

Inflation is non-existent. Commodities are the cheapest in several years. Wages are not going up, they are headed down. There is a lot of surplus manufacturing capacity and labor sitting on the sidelines. The USA is not in a vacuum in regards to the world's deflation. You saw it first in Japan, now it is worldwide.

The USD is the strongest that it has ever been in recent times. The IMF and other international Financial entities have warned the Fed not to raise rates.

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"War on Savers"
The "War on Savers" is non-existent. If banks had places to loan out the money you deposited, they would increase rates on their own to get more funds to loan. Or if they were not getting enough at the rates they are offering, they would increase rates.

So, while a rate increase is not needed, look for a small hike to satisfy the member banks and CEOs.
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Old 09-15-2015, 09:54 AM   #24
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I don't recall ever seeing such global obsession on a possible Fed action. The World Bank, IMF, former Fed chairmen, heads of major investment firms have all expressed their (self-serving) views quite publicly, and the media is going crazy.


Brings to mind this
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Old 09-15-2015, 09:56 AM   #25
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Quote:
Originally Posted by Htown Harry View Post
Prediction: no change.

I have a hard time reconciling the arguments to "get it over with" or "the markets need it" with the Feds' mission of inflation-fighting and low unemployment. I think the FMC will, too.
It doesn't reconcile at all. That's just the markets talking.

Although there is merit to "getting off zero" even though it should probably have been done last year.
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Old 09-15-2015, 10:01 AM   #26
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Originally Posted by Senator View Post
The ONLY reason for the Fed to raise interest rates is to increase profits for their member banks. The banks have loaned a lot of money on ARMS and HELOCs. If the rate raises, the banks make Billion$$ when the rates get adjusted. The banks basis and interest rates are the same, the borrower pays more.

I have no doubt that plays a larger part of the hidden equation than any 'mandates' given by congress. Bank CEOs need bonuses too. Just as you and I enjoy our dividend checks, the CEOs do too.

Inflation is non-existent. Commodities are the cheapest in several years. Wages are not going up, they are headed down. There is a lot of surplus manufacturing capacity and labor sitting on the sidelines. The USA is not in a vacuum in regards to the world's deflation. You saw it first in Japan, now it is worldwide.

The USD is the strongest that it has ever been in recent times. The IMF and other international Financial entities have warned the Fed not to raise rates.

The "War on Savers" is non-existent. If banks had places to loan out the money you deposited, they would increase rates on their own to get more funds to loan. Or if they were not getting enough at the rates they are offering, they would increase rates.

So, while a rate increase is not needed, look for a small hike to satisfy the member banks and CEOs.

I thought this was an excellent article slightly rewording the question of rate increases. Along with a simple explanation of what's really happened/is happening.

Fed interest rate hike - Quartz

Quote:

For years, everyone involved with investing has wanted to know: When will the Federal Reserve raise interest rates?

But there’s another important consideration that isn’t asked nearly enough: Can the Fed raise interest rates?
My vote is they're too chicken to raise rates, and also, waiting too long. If a 1/4 point increase is going to crash the market, then "let 'er crash". I'm not getting any younger and I want cheap stocks to buy.

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Old 09-15-2015, 10:01 AM   #27
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Anyone know how much the rate would have to go up for a SS COLA for 2016, if that is even the basis for one?
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Old 09-15-2015, 10:07 AM   #28
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Anyone know how much the rate would have to go up for a SS COLA for 2016, if that is even the basis for one?
CPI is what controls the COLAs.
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Old 09-15-2015, 10:33 AM   #29
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Thank you.
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Old 09-15-2015, 11:31 AM   #30
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Well, seeing as Mortimer and I have a copy of the latest Fed Report. I know I'll be on the right side of this discussion!
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Old 09-15-2015, 09:03 PM   #31
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See this:

MutualFunds.com

From the article:

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I have also learned this important lesson. No matter how much we would like to believe otherwise, there’s only one person who knows where the economy and the market are headed — and if I ask him, at least in this lifetime, I won’t get an answer. And in the next one, it won’t matter anyway.
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Old 09-15-2015, 11:09 PM   #32
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My guess is up .25 to get a little wiggle room for later if needed. And then how the markets react will give the feds good input for what to do the next time.

But since I'm guessing I may get thurfed.
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Old 09-17-2015, 01:22 PM   #33
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My guess, they do nothing and say nothing that is intelligible.
We have a winner

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That is my guess.
First runner up
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Old 09-17-2015, 01:56 PM   #34
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My vote is they're too chicken to raise rates, and also, waiting too long. If a 1/4 point increase is going to crash the market, then "let 'er crash". I'm not getting any younger and I want cheap stocks to buy.


You are been to kind, the Fed is stuck in mud. I do not for see any Fed hike any time soon at all.
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Old 09-17-2015, 02:14 PM   #35
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Oh good , it's over so we can go on to the important things [MOD EDIT]
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Old 09-17-2015, 02:26 PM   #36
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My favorite rationale from a talking head over the last few weeks was that the rate needed to be raised just so that it could be lowered later.
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Old 09-17-2015, 02:38 PM   #37
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My favorite rationale from a talking head over the last few weeks was that the rate needed to be raised just so that it could be lowered later.
I have actually heard that quite a few times over the last few days.............
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Old 09-17-2015, 03:27 PM   #38
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I was waiting (last 10 days) to see if CD rates would go up Sep 18, even 10-15 basis points, but I guess it's not going to happen.
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Old 09-17-2015, 03:59 PM   #39
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I'm not surprised there was no raise. IMHO there will be no reason to raise rates until wages grow. I'm of the opinion that you can't have inflation without wage growth.
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Old 09-17-2015, 04:11 PM   #40
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I'm not surprised there was no raise. IMHO there will be no reason to raise rates until wages grow. I'm of the opinion that you can't have inflation without wage growth.
Would respectfully disagree about the "inflation without wage growth". Inflation is not related just to wages. What if oil went to $150 or $200 or $300 (not likely, I know)? Think back to 1973-1974, an external shock, the oil embargo.
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