Fed Hike

michaels

I know certain posters were quite bullish in their annual predictions for interest rates to start to normalize quite quickly this year, led by the US but with the UK following closely behind. I have to admit I didn't see it then and still don't see it now.

DiggerUK

The Federal Reserve will have had a reason for the December rise, economic sanity won't be top of the list of usual suspects.

Like him or loathe him, but AEP from The Telegraph has a good take on the soundness of the decision..._

http://www.msn.com/en-gb/money/topstories/dollar-tumbles-as-fed-rescues-china-in-the-nick-of-time/ar-BBp8Ptr?li=BBoPMmp&ocid=mailsignoutmd

Thrugelmir

DiggerUK wrote: »

The Federal Reserve will have had a reason for the December rise, economic sanity won't be top of the list of usual suspects.

No one said that the transition was going to be painless. Finally we are witnessing a real unwinding of built up positions. Only know the losers when the music stops.

worldtraveller

Federal Reserve Chair Janet Yellen told Congress Thursday the central bank has not ruled out imposing negative interest rates if the economy takes a downward turn but is investigating their viability.

“I wouldn’t take them off the table but we would have work to do to make sure they would be workable,” she told the Senate Banking Committee in her semiannual monetary policy report to Congress.

The Fed raised its benchmark interest rate in December for the first time in nine years -- from near zero to 0.4% -- amid strong job growth and near-normal unemployment. But global economic troubles and a market selloff have raised concerns about a U.S. slowdown and even recession.

Still, Yellen said Thursday she doesn't expect the economy to wobble enough to warrant a cut in interest rates, let alone a drop into negative territory.

USA Today

padington

michaels wrote: »

I know certain posters were quite bullish in their annual predictions for interest rates to start to normalize quite quickly this year, led by the US but with the UK following closely behind. I have to admit I didn't see it then and still don't see it now.

The only place interest rates are going is down. Its why Osborne is taxing the hell out of property. Low interest rates whilst making out they are going to go up ( as much as possible ) is the plan.

padington

This idea that what the us and uk wants is to encourage saving and people to stop spending is comical.

mwpt

padington wrote: »

This idea that what the us and uk wants is to encourage saving and people to stop spending is comical.

Who ever said that?

MARTYM8`

padington wrote: »

This idea that what the us and uk wants is to encourage saving and people to stop spending is comical.

People can of course choose to do what's best for the wider economy today or alternatively save for the future because if it goes pearshaped the Government won't have any money left to support them.

Without a growth in debt there is no growth.:D

padington

mwpt wrote: »

Who ever said that?

I spoke to a high earning stock broker last year, friend of the family. He advised selling Property because of imminent interest rate rise. I asked why would they want to rise interest rates and he cited trying to get people back into saving as being the key reason. Essentially trying to get the economy back to 'normal'.

I don't buy it. They can try all they want to get interest rates back to 'normal', it's not going to happen for a good while yet.

They tried to raise interest rates and look at the !!!!!! storm that happened.

It's back to the classroom time and start thinking about negative interest rates if anything.

http://www.telegraph.co.uk/finance/bank-of-england/12150486/Markets-rule-out-UK-interest-rate-rise-until-end-of-decade.html

http://www.telegraph.co.uk/finance/economics/12151611/Sweden-takes-negative-interest-rates-even-lower-as-Riksbank-fights-to-keep-up-with-global-stimulus.html

Thrugelmir

padington wrote: »

It's back to the classroom time and start thinking about negative interest rates if anything.

Equally as bad for leveraged borrowers as means we are heading for deflation.