Fed raises rates

[tommcginnis]

Rates were what, 0.25% for 8 straight year? Now apparently we can't raise them fast enough?

It seems like the Fed has two speeds which seems bizarre.

No. Rates were 0-0.25% for 7 years ("Close enough!), but have risen by just the quarter-point since the first, December 2015. Very steady.
Here is a great history...
https://www.thebalance.com/fed-funds-rate-history-highs-lows-3306135
☼ The FED started lowering rates in 2006, from ~5%.
☼ Rates hit ~0% in December 2008, during Bush45's term.
☼ Janet Yellen's first FOMC mtg was when rates were first raised after the crisis: December 2015.
☼ Rates have risen very slightly, very steadily, since then.

Them are the facts -- which won't confuse some hereabouts, that's for sure.
The FED are about monetary policy, not fiscal.
The FED are *not* about one political party OR THE OTHER.
Them as think otherwise should try out some history, first.

 

[SteveM]

The markets rallied in spite of Odumbo's policies, not because of them. It was all the Fed.

People seem to forget that the Fed has been hiking for the last 2 YEARS, and the markets rallied very strongly during the entire time......until all of a sudden......dear leader started badgering the Chinese and (to a lesser extent) the EU on trade and started implementing tariffs.

Couple this with a sudden surge in Brexit uncertainty, and global confidence has been rightly shaken.

Recent chaos in the markets has far more to do with politicians than it does the Fed in my opinion.

 

[Scataphagos]

People seem to forget that the Fed has been hiking for the last 2 YEARS, and the markets rallied very strongly during the entire time......until all of a sudden......dear leader started badgering the Chinese and (to a lesser extent) the EU on trade and started implementing tariffs.

Couple this with a sudden surge in Brexit uncertainty, and global confidence has been rightly shaken.

Recent chaos in the markets has far more to do with politicians than it does the Fed in my opinion.

It's normal for markes to take interest rate increase "with a grain of salt" up to a point... thinking that earnings can "handle and overcome" the negative effect of rates. But at some point, the markets say "no mas".

As for "chaos in the markets"... beside rates, the other biggie is potential trade war with China. That's partly political, of course... and long overdue. America has been hosed and abused on the trade front for a long time.

 

[tommcginnis]

they are too late now, the economy is grinding to a halt, worldwide economic slowdown is here...too late now....

In what world do you live?
The world where a sub7% GDP growth rate in the second *largest* world economy is seen as recession???
The world where Germany's industrial activity index backs off of 60 is seen as recession?!?
The world where domestic unemployment is not sub6%, or sub5%, but sub4% ?!?!?!

The fact that p/e's have bumbled along at >20-25 for the past few years -- and are now *edging* down to historic averages..... is *that* the complaint?

Call me when the S&P p/e hits 15, then we'll talk.
2350 is when we *start* to have underpriced markets.

(("It's like, they all bitch 'Take away the punch bowl! Take away the punch bowl!'
and then you take away the punch bowl,
and then everyone's screaming, 'Where's the damn punch bowl?!?!?'"))

 

[destriero]

Will Trump throw a hissy fit?

Iceberg? What iceberg?!

I love the nuanced move away from his boy Trump. Scat will be a Never Trumper in a few months. Ahh, the hypocrisy.

 

[S2007S]

In what world do you live?
The world where a sub7% GDP growth rate in the second *largest* world economy is seen as recession???
The world where Germany's industrial activity index backs off of 60 is seen as recession?!?
The world where domestic unemployment is not sub6%, or sub5%, but sub4% ?!?!?!

The fact that p/e's have bumbled along at >20-25 for the past few years -- and are now *edging* down to historic averages..... is *that* the complaint?

Call me when the S&P p/e hits 15, then we'll talk.
2350 is when we *start* to have underpriced markets.

(("It's like, they all bitch 'Take away the punch bowl! Take away the punch bowl!'
and then you take away the punch bowl,
and then everyone's screaming, 'Where's the damn punch bowl?!?!?'"))

2350 haha....I'll call you when the s$p is under 1800, how about that??? investors won't care about a market PE at 15 when ecomomies are falling apart and liquidity is frozen.... unemployment numbers ticking higher and gdp falling off a cliff ....next crisis will be greater than 2008...

 

[MKTrader]

No. Rates were 0-0.25% for 7 years ("Close enough!), but have risen by just the quarter-point since the first, December 2015. Very steady.
Here is a great history...
https://www.thebalance.com/fed-funds-rate-history-highs-lows-3306135
☼ The FED started lowering rates in 2006, from ~5%.
☼ Rates hit ~0% in December 2008, during Bush45's term.
☼ Janet Yellen's first FOMC mtg was when rates were first raised after the crisis: December 2015.
☼ Rates have risen very slightly, very steadily, since then.

Them are the facts -- which won't confuse some hereabouts, that's for sure.
The FED are about monetary policy, not fiscal.
The FED are *not* about one political party OR THE OTHER.
Them as think otherwise should try out some history, first.

But your "facts" completely support the view that Fed policy has been political. The crisis was over WAY before Dec. 2015. But if the Fed started an aggressive rate hiking/QE tightening policy in, say 2014, it may have hurt the markets (a lot more than what happened in 2015-16), damaged Obama's legacy and seriously hurt Hillary's chances. A true apolitical, data-dependent Fed wouldn't have waited 7 full years. 7 years of ZIRP and massive QE was completely unprecedented.

 

[MKTrader]

It's normal for markes to take interest rate increase "with a grain of salt" up to a point... thinking that earnings can "handle and overcome" the negative effect of rates. But at some point, the markets say "no mas".

Yep, that's EXACTLY what happened circa 2004-2006.

 

[destriero]

2350 haha....I'll call you when the s$p is under 1800, how about that??? investors won't care about a market PE at 15 when ecomomies are falling apart and liquidity is frozen.... unemployment numbers ticking higher and gdp falling off a cliff ....next crisis will be greater than 2008...

I don't see a 50% drop, so no, it won't be worse than 2008.

 

[Nine_Ender]

Look back at my last 1000+ posts ... I have consistently yelled that rates should have been well above where they are today....they should have been well over 5 % back in 2012...they are so far behind now that the next recession/crisis will send rates straight to zero and most likely go negative as I have been predicting...they are too late now, the economy is grinding to a halt, worldwide economic slowdown is here...too late now....you will be lucky to see 3% interest rates by end of 2019...my immediate prediction would be .50%-1% before 3-4%!!!!!

Ok enough, time to take you to the woodshed and pour some water on your bs.

Your posts have been complete trash for 9 years. In 2015, we both weighed in what was coming later in the year. I nailed the event, one rate hike and a normal size correction. You said a 40-60% crash and negative US interest rates within 2 years ( expired ). Again, I will reiterate, there will NEVER be negative interest rates in the US. That's how bad your judgement is, that you think this is coming short term. There is no "normal" interest rate at 5%+.