Fed Hike

Out,_Vile_Jelly

As a result of this news I have panicked and sold my house to someone on the HPC forum for two hundred quid.

JackLeach

What seems to be happening is most banks increase the amount of interest they charge to borrowers, but they have not increased the amount they pay to savers.

Will it be the same in the UK when interest rates start to correct back up next year?

mayonnaise

Out,_Vile_Jelly wrote: »

As a result of this news I have panicked and sold my house to someone on the HPC forum for two hundred quid.

Good call.
As we learned from our HPC guests, assets are liabilities, so it's best the have none at all.
You will also enjoy the freedom of being able to relocate to a scruffier part of town in case your landlord ups the rent.
Merry Christmas! :xmassmile

Generali

mystic_trev wrote: »

Gen. Have you any idea when we're going to start raising ours in the UK.

Haha, if I knew that then I'd be running a $$$$$$$$$bn fixed income fund rather than being a 40++ y/o teenage scribbler.

Surely it's gotta be sooner rather than later. Unemployment is cascading down and employment rates are at, I believe, an all time record (happy to be corrected).

Presumably a rising Fed Funds rate means a rising USD which means a falling GBP which adds pressure to both the employment market and the cost of living.

I find it hard to see anything else for the UK other than following the Fed up. The status quo is maintaining extra-ordinary rates. A rise is a return to the plain old ordinary.

MFW_ASAP

Out,_Vile_Jelly wrote: »

As a result of this news I have panicked and sold my house to someone on the HPC forum for two hundred quid.

I had to give them money to take it off my hands. Thank goodness the worry of owning a home has been lifted from me. I can now enjoy the freedom of renting a home without the hassle of having to replace the roof and central heating boiler every year!

purch

michaels wrote: »

Can anyone explain how the fed 'range' works? Could zero to 0.25 and 0.25 to 0.5 both mean effectively 0.25% or alternatively does it mean an increase from zero to 0.5%?

The Fed Funds target is the rate the Federal Reserve will pay Banks for deposits. The actual rate will vary daily based on the Funds market. but will likely settle somewhere in the middle of what the FOMC sets as it's target Band.

The Discount rate (which is the rate the Fed will lend at) was raised from 3/4 % to 1 %, so that indicates the FOMC do want the Funds rate to increase, so it may go closer to the top of the Band.

N.B. Each individual Federal Reserve Bank can set it's own Discount Rate as it see's fit, but it has been a long time since one or more was out of step with the consensus for any period.

mystic_trev

Generali

mystic_trev wrote: »

It reminds me of the quote during the credit crunch: "I've lost half my wealth and I've still got my wife".

michaels

purch wrote: »

The Fed Funds target is the rate the Federal Reserve will pay Banks for deposits. The actual rate will vary daily based on the Funds market. but will likely settle somewhere in the middle of what the FOMC sets as it's target Band.

The Discount rate (which is the rate the Fed will lend at) was raised from 3/4 % to 1 %, so that indicates the FOMC do want the Funds rate to increase, so it may go closer to the top of the Band.

N.B. Each individual Federal Reserve Bank can set it's own Discount Rate as it see's fit, but it has been a long time since one or more was out of step with the consensus for any period.

Thanks Purch

setmefree2

Generali wrote: »

I find it hard to see anything else for the UK other than following the Fed up. The status quo is maintaining extra-ordinary rates. A rise is a return to the plain old ordinary.

I guess it's predictable but I've gotta wonder if the MPC is being too slow in raising rates and is fueling a horrible housing bubble??? How are all those borrowers with big mortgages going to cope when rates start rising?

Most UK predictions seem to think May and Nov 2016 for a UK hike.