Thur Fed meeting

[Moneygrubber]

Whats your prediction for no raise or a fed raise this week and market reaction? I think we get a 1/4 point raise and a big relief rally. What do you think?


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[aaronc879]

I think we get a 1/4 point raise and a big drop followed by a comeback back to where we are now.

 

[pb4uski]

I can't control it and I'm not selling anytime soon so que sera sera.

No change or +25 bps would not be a surprise.

 

[Senator]

They might go 1/8 point, but are fools if they do anything but stay put. If anything, we are in a deflationary environment, not inflationary.

If they raise rates, it will further kill jobs and exports. Outsourcing will be even cheaper. We have a surplus of capacity in this economy, companies are not producing as much as they could. Prices are artificially higher than they should be. Top line revenue growth for many companies is flat.

The great recession started when the Fed raised rates, and caused the market to be stagnant for 15 years.

 

[frank]

hopefully the war on savers might be getting a little reprieve, 1/4 point will hardly make a difference, much less kill the economy. it would be nice to see interest rates on cd's at a level that at least keeps up with inflation.

 

[Car-Guy]

1/4 point, for now

 

[rodi]

I agree with the 1/4 point school of thought. I can't make any predictions on the market because everytime I think I understand and try to predict - it does the opposite. So... in the immortal words of W2R..... "Wheeeee"

 

[Lakewood90712]

They might go 1/8 point, but are fools if they do anything but stay put. If anything, we are in a deflationary environment, not inflationary.

If they raise rates, it will further kill jobs and exports. Outsourcing will be even cheaper. We have a surplus of capacity in this economy, companies are not producing as much as they could. Prices are artificially higher than they should be. Top line revenue growth for many companies is flat.

The great recession started when the Fed raised rates, and caused the market to be stagnant for 15 years.

The entire world has surplus manufacturing capacity, to a great extent (IMO) from central banks flooding cheap money. If this welfare is to be fair, everyone who files a tax return should be able to borrow cheap money from the fed, not just banks. How about that for a direct stimulus ?.

US and other businesses who go into a tizzy over rate increases are so weak they should be allowed to fail.

Sorry everyone, I'm having a bad day. Rant over (for now).

 

[jim584672]

My guess, they do nothing and say nothing that is intelligible.

 

[HFWR]

My guess, they do nothing and say nothing that is intelligible.

"If I turn out to be particularly clear, you've probably misunderstood what I've said."

Alan Greenspan

 

[pb4uski]

....US and other businesses who go into a tizzy over rate increases are so weak they should be allowed to fail.
...

+1 if 25 bps makes a big difference then the business is on thin ice to begin with.... Darwin needs to win every now and then.

 

[MRG]

+1 if 25 bps makes a big difference then the business is on thin ice to begin with.... Darwin needs to win every now and then.

+2

 

[Marc]

I agree that we should (hopefully) get a 25 bps jump with justification to "get off zero" with a strong statement that this will be last increase until 1) we see impact on economic activity (should be none) of this increase and 2) that inflation has increased close to 2%.

I think doing nothing would show the current Fed Chairman as incompetent and too scared to act.

As for the market, I think we are rangebound between 1875 and 2000 until mid-October when earnings start coming in. Positive earnings and we make it to 2200 this year; bad fundamentals and we are down to 1600 or less.

Marc

 

[skyvue]

They will do nothing right now. When they eventually do a 1/4 point raise, the markets will be down 3-4% that day.

 

[Bikerdude]

25 basis points. Lets get it over with.

 

[brewer12345]

My guess, they do nothing and say nothing that is intelligible.

That is my guess.

 

[Chuckanut]

We have an economy that is predicated on cheap money at the expense of savers. Those who borrow the cheap money have more political power than millions of savers.

So, I do not expect much change. Maybe +1/8 percent.

Note: I have been so wrong for so long on interest rate predictions you would be wise to view this as a contrarian opportunity.

 

[audreyh1]

I'd like to see a small token hike just to get the markets past this infernal "wait". That will get the Fed off zero. They then have a tiny wiggle room to "ease" again in the face of an economic slowdown - and given the length of the current expansion a slowdown should be here sooner rather than later.

Gundlach has a recent slide show showing that a Fed rate hike is not warranted by the current state of the U.S. Economy Jeff Gundlach Sept.8 Webcast - Business Insider

 

[audreyh1]

hopefully the war on savers might be getting a little reprieve, 1/4 point will hardly make a difference, much less kill the economy. it would be nice to see interest rates on cd's at a level that at least keeps up with inflation.

Until the U.S. And global economies take off, savers will not be rewarded. That is just the way it is - the Fed doesn't control that. If deflation is threatening, you aren't going to get paid a lot to hold your cash.

 

[Htown Harry]

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.

 

[Jack_Pine]

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..................

 

[Running_Man]

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.

 

[Senator]

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.

"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.

 

[MichaelB]

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
.
.

 

[audreyh1]

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.