9.3 million borrowers wont be able to handle a 0.25% fed rate hike...

look all punch drinking aside.. i understand everyone has opinions.. and S2007S is a off.. yet you attack him for having opposing views.. it does seem ridiculous to think that his next prediction is going to be right.. Nine_ender i'm sure i'm as well read on you on the subject
 
Nine_Ender said:
What I am saying is blind faith in higher interest rates based on the meaningless idea of historical "normal" is uneducated. Policy is based on creating better outcomes not deliberately creating negative outcomes. If you think government policy isn't geared at all to the masses in the US you haven't thought this through well. For example, higher personal tax rates aren't popular with the masses.
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Completely agree... blind faith "just because" is ridiculous. And yes, I would like to think negative outcomes are not deliberate. With all that, your example using personal tax rates, a.k.a. the US tax code doesn't make your point. The tax code is about behavior modification. But we don't need to discuss that.

Why aren't people comfortable with higher taxes? Sure there is the obvious, less money for ME! But the intersect for most, I believe, is what's in it for ME? For main street, the financial engineering of the last 8 years or so has not worked, just as spending of tax receipts is done imprudently and somewhat arrogantly. Tax rates, like interest rates, are cornerstones to a thriving and robust US economy. Both are financially engineered for benefit. However, only on the surface level are the outcomes positive for we the people. The current state of the world is anything but operating on the surface level. History has shown interest rates, and taxes, are about Power... over the masses, and marketplaces.

Thanks for the civil discussion.

PS. YAY! I succeeded in keeping my response non-political!
 
JackRab said:
Another thing, if the stock market 'crashes' on .25 or .50 increase... that will be a massive buy right there. Rate increase is good for banking... and that small of an increase isn't going to create horror for normal households, so it's not going to make a big impact in corp earnings...Bond market is another thing though...
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How would an increase in rates impact the reserve ratio for banks? A lot of banks are sitting right on the margin for liquidity. I seem to recall that it will influence banks and lending ratios but it's been a while since I took Money, Banking and Public Policy in college and I don't remember the consequences.
 
@DallasCowboysFan normally it would lower excess reserves, because it's getting more interesting to lend with a higher rate.

I would say a normalisation/move away from zero is better in long run for anything finance related.
 
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