Thur Fed meeting

[CCdaCE]

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

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.

-CC

 

[Youngster]

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?

 

[audreyh1]

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.

 

[Youngster]

Thank you.

 

[Cassius King]

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!

 

[Options]

See this:

MutualFunds.com

From the article:

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.

 

[Christine]

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.

 

[MichaelB]

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

We have a winner

That is my guess.

First runner up

 

[HF63]

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.

 

[Lakewood90712]

Oh good , it's over so we can go on to the important things [MOD EDIT]

 

[Bestwifeever]

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.

 

[Jack_Pine]

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

 

[DEC-1982]

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.

 

[ESRwannabe]

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.

 

[DEC-1982]

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.

 

[ESRwannabe]

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.

Well, my definition of inflation may not be standard, but the way I see it, if there isn't any wage growth then that is just an example of the standard of living going down and not inflation.

It depends on what you want to throw into the bucket to watch. I think the only thing that is really important are wages because the other stuff could all go away with technology improvements. Example: Food prices used to be very important but now with technology we can produce more food than we can use.

 

[Moneygrubber]

Good call on the no raise crowd, seems like the market doesnt like it for now, theres always next week,,,,


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[Mulligan]

Well, my definition of inflation may not be standard, but the way I see it, if there isn't any wage growth then that is just an example of the standard of living going down and not inflation.



It depends on what you want to throw into the bucket to watch. I think the only thing that is really important are wages because the other stuff could all go away with technology improvements. Example: Food prices used to be very important but now with technology we can produce more food than we can use.

It was all anecdotal, but the above is why I went all into preferred stocks. Heck even Cramer was screaming yesterday about technology is killing off wage growth. And oil does not appear to be an inflation contributor on the horizon anyways. Right or wrong anytime I can get safe yield 400-500 BP above 10 year and inflation rate also, I can sleep with that. I will never corner the market wealth with this strategy, but 4 times a year, I surelove those dividend dumps.


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[Senator]

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.

You may get some prices raised, but demand would fall. Overall, the economy would not grow. If there is a finite amount of money to spend, that's all that can be spent. Money spent on oil related products would reduce other spending. That is not inflation.

Too much money, chasing too few goods is the definition of inflation. We have a surplus of capacity, both in terms of labor and manufacturing.

Inflation is a long way off. Of course, the government could spend more, and that might create it.

Heck even Cramer was screaming yesterday about technology is killing off wage growth.

We also have a HUGE surplus of labor, for various reasons. And thousands more workers coming on-line in the US everyday. If the price of the dollar gets higher, goods overseas get cheaper. Outsourcing gets easier.

Wages are headed down for the foreseeable future. Of course, if we mandate a $15 an hour minimum wage, that might spur inflation.

 

[Mulligan]

You may get some prices raised, but demand would fall. Overall, the economy would not grow. If there is a finite amount of money to spend, that's all that can be spent. Money spent on oil related products would reduce other spending. That is not inflation.

Too much money, chasing too few goods is the definition of inflation. We have a surplus of capacity, both in terms of labor and manufacturing.

Inflation is a long way off. Of course, the government could spend more, and that might create it.



We also have a HUGE surplus of labor, for various reasons. And thousands more workers coming on-line in the US everyday. If the price of the dollar gets higher, goods overseas get cheaper. Outsourcing gets easier.

Wages are headed down for the foreseeable future. Of course, if we mandate a $15 an hour minimum wage, that might spur inflation.

Especially ones not suited for todays skill base, I imagine. I heard on the radio the other day that males today of workforce age are at the lowest level of employment since record keeping originated in the 1940s. Working women are on the downslide too after peaking about 10-15 years ago. I cant imagine they are all ER's.


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[Marc]

We would have been a lot better off if Fed Chairman had a case of laryngitis yesterday. Statement was fine; then she started babbling about having no idea what was happening, no idea what was going to happen, so best to do nothing.

Marc

 

[Lakewood90712]

We would have been a lot better off if Fed Chairman had a case of laryngitis yesterday. Statement was fine; then she started babbling about having no idea what was happening, no idea what was going to happen, so best to do nothing.

Marc

Conclusion: Yellen was being honest ?

 

[Christine]

then she started babbling about having no idea what was happening, no idea what was going to happen, so best to do nothing.

Aka gut feeling or winging it? It's honest enough. As an ex-engineer that is sometimes the solution after checking and calculating for days.

 

[audreyh1]

I think it's pretty clear that what stayed the Fed's hand was the poor international economic situation, even though the U.S. is continuing (very gradually) to improve. Our economy is not in a vacuum and our inflation is WAY below the 2% target. CPI over the past 12 months was only 0.2%, one tenth of the target.