Whats that???? No more fed hikes for the rest of 2016, hahah

[S2007S]

John Authers ‏@johnauthers 3m3 minutes ago
Chance of Fed hike in September now zero, says Mr Market. But there is now a chance of a cut....

It was zero since the Beginning of 2016...now they just have another reason to say no rate hikes....I have a thousand times that rates will not rise higher than 1%....by 2020 rates will still be at historical lows....they cannot raise them....that raise in December will be erased soon and once another economic collapse comes the fed will have NO where to go ....that's when NEGATIVE rates will come out to play with wallstreet... If the fed was smart they would have raised rates to 5-6-7%....but nope...they can't...too much debt and with economy to weak they kept rates at zero ....they will remain like this for the next decade.

 

[clacy]

Perhaps there were wide swings, and the Dow also only had 11 stocks in 1884, mostly railroads. The meeting at Jeckyll Island was in 1910. That's over 100 years of "historical charts" in the market. I think the S&P 500 index wasn't even tracked until the 20's.

Check out the bull and bear pullbacks since the 1929 crash. Some interesting charts.

http://www.yardeni.com/pub/sp500corrbear.pdf

I wasn't even referring to the stock market. It's just a pet peeve of mine that everyone uses the Fed as a boogeyman.

Anyway, look at long term inflation charts. It was not uncommon at all to have double digit inflation or deflation before the Fed, so it was not as magical as people make it out to be.

 

[ScalperJoe]

It's just a pet peeve of mine that everyone uses the Fed as a boogeyman.

Why? If the Fed engages in counterfeiting by creating "fiat currency" (i.e. money out of thin air) which reduces the purchasing power of individuals and creates perpetual debt, then who is responsible, if NOT for the Fed?

 

[ScalperJoe]

Anyway, look at long term inflation charts. It was not uncommon at all to have double digit inflation or deflation before the Fed, so it was not as magical as people make it out to be.

"It was not uncommon at all to have double digit inflation or deflation before the Fed..."

What is your source for "long term inflation charts" before the fed?

Here is the inflation data since 1913:

http://inflationdata.com/Inflation/Inflation/DecadeInflation.asp

Here is the inflation data since 1775:

http://www.businessinsider.com/chart-inflation-since-1775-2013-1

I think you may want to re-examine that pet peeve of yours.

 

[mpdxc]

Peter Schiff called it I think. The Fed would just keep talking about it and deliberate or pretend to, but never do any serious hikes year after year until a real collapse ends it all.

 

[S2007S]

Peter Schiff called it I think. The Fed would just keep talking about it and deliberate or pretend to, but never do any serious hikes year after year until a real collapse ends it all.

Peter Schiff has said over and over that the fed is just playing around...they are bluffing at each fed meeting....Peter Schiff is the guy that's telling everyone how it is but no one is listening... They cannot raise rates and anytime something like a bad job numbers or something like a BREXIT arrives they use that as an excuse not to raise...meanwhile they weren't going to raise rates to begin with....they will take back the quarter raise and bring rates NEGATIVE when the next crisis comes.

 

[ironchef]

It seems quite obvious to me:

The US Government cannot afford an interest rate increase so the Fed has to keep the rate low. Look at it this way, the federal debt is ~$19 trillions, a few years back the federal government moved to shorter term maturity (mostly < 5 yrs) to "save on interest rate". So, now a 1% increase in interest rate will cost the USG ~>$100 billions more in budget deficit per year. The 2016 federal budget is ~$3.5 trillion with a ~$500 billions deficit. Another ~$100 billions is adding >20% more to the budget deficit! In an election year? Hell no.

Inflation? Hell it helps further depreciates our currency and in a way reduces real deficit. A 2% inflation "save" the USG ~$400 billion per year. So inflation wipes out the 2016 deficit. I see why a 2% inflation target makes sense for the Fed.

It is a winning combination for the USG, low interest rate and some inflation. So, the Fed will keep it for as long as possible.

For us little guys, complaining is futile. It is up to us to figure out how we can take advantage of such a situation.

I am not trying to argue or debate, just a non economist, non finance guy's opinion, probably all wrong.