Anyone think that we'll see an interest rate hike in 2021?

[kmiklas]

The general strategy since the Coronavirus outbreak and the lockdown has been to reduce the interest rate to attempt to compensate for the lost economic growth or simply to avoid recession. I can't see the interest rate increasing unless there is a large increase in inflation. That is the typical response of central banks when inflation occurs because it makes outstanding base rate linked debt repayments higher, which has a dampening effect on the economy.

Nah.. they lowered rates to stoke the T economy for the election. The virus was just a façade.

 

[kmiklas]

Eurodollar curve says "No". Common sense says "Hell No".

COVID has done grave damage to World economies and there is no chance that the Fed, the ECB, or the BoJ raise rates in 2021. None. Zero.

Do you think that COVID will be in the rear mirror and the economy will be in hyperdrive?
If that's the case, the Dems will find another way to destroy the economy like a corporate tax hike and a hard stop on fracking.

QFT. Let's touch base this time next year.

 

[morganist]

Nah.. they lowered rates to stoke the T economy for the election. The virus was just a façade.

It might be different in America because they only have I think 10% of the government debt in the form of Index Linked Gilts, but in the United Kingdom it is 25%

Nah.. they lowered rates to stoke the T economy for the election. The virus was just a façade.

There are two other reasons why they will want to keep interest rates low, the first is to stimulate economic growth and the second is to keep the government debt repayments low.

 

[piezoe]

How would an interest rate hike make things less expensive?

answer: it will strengthen the dollar making things nominally less expensive. What citizens have to pay attention to is whether their income change exceeds inflation (the inflation that counts for them), keeps up with it, or lags.

 

[piezoe]

Nah. Unleaded back under 2 bucks. Corona roaring again. Inflation should continue to stay muted.

It's not muted in some sectors.

 

[Masil]

You might be right, they can't keep it low this time, no matter how hard they try.

 

[SunTrader]

It's not muted in some sectors.

Like for instance?

 

[piezoe]

Like for instance?

for instance, lumber. building materials.

 

[SunTrader]

for instance, lumber. building materials.

Ok that's some but other than new home buyers, the rest of us ... yawn.

 

[piezoe]

Ok that's some but other than new home buyers, the rest of us ... yawn.

Streaming broadcast media! +50%, Food 3.9%/12 mo. (does not affect those who don't eat), equities.