Rate hikes are good!!!!!!!!!!

M

myminitrading

Today we had Paulson out jaw boning the dollar, and as I suspected the fed officials would come out and talk tough, thats just what their doing today. Talking tough to keep the dollar from falling off a cliff.

Now wall street will say, rate hikes are good it means the economy is strong yada yada yada.
 
Now if the Fed gets spooked by the falling dollar and that ties their hands leaving them unable to lower rates to prevent further $ selling. And at the same time bonds continue to rally on recession fears, leading to lower yields- how does lower bond yields affect mortgage rates?
 
Quote from aeliodon:

Now if the Fed gets spooked by the falling dollar and that ties their hands leaving them unable to lower rates to prevent further $ selling. And at the same time bonds continue to rally on recession fears, leading to lower yields- how does lower bond yields affect mortgage rates?
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The fed will have to talk tough and act like they are going to raise rates to support the dollar decline. Everyone knows they will do nothing. Thats why the dollar is still falling.
 
re: Now if the Fed gets spooked by the falling dollar and that ties their hands leaving them unable to lower rates

I believe it's just the opposite. A falling dollar scenario you would ease policy. The tricky thing is the economy is really humming it was a mid cycle slowdown. The next rate move should be up. If the fed defends the dollar he might be unleashing the Inflation genie. especially wage- as productivity is now decidedly weak.
 
DHpar- The Dollar falls when the perception is we have a weakening economy. FED RULE 101 You lower rates into a weakening economy. My contention is the next move by the Fed was up until this recent slide in the dollar. Now we have bought ourselves an extra quarter to invest in the market....
 
You're stoned again. Can you explain your theory that the Fed was going to raise rates, but the dollar fell, causing them to not raise (raising rates would help the dollar) ??? Lay off the grass man.
 
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