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Thread: The Official Dec. 16 Fed Rate-Hike Thread

  1. #1

    The Official Dec. 16 Fed Rate-Hike Thread

    Will they or won't they?

    ZeroHedge ain't buying it. http://www.zerohedge.com/news/2015-1...actually-do-it

    They have to raise rates or they lose what little credibility they have left, but if they raise say .1-.25 % it will throw securities into a tizzy and debt service into a spiral...

    Many think they won't raise rates and leave policy unchanged until after the holidays.

    Others think it will be a small raise in the rate followed by a small selloff on Wallstreet followed by yet another round of QE...

    How Will this affect home prices? How Will this affect holiday corporate earnings? So much up in the air!

    What say RPF?

    There are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights. War for any other reason is simply a racket.
    -Major General Smedley Butler, USMC,
    Two-Time Congressional Medal of Honor Winner
    Author of, War is a Racket!

    It is not that I am mad, it is only that my head is different from yours.
    - Diogenes of Sinope



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  3. #2
    The bubble will burst. I don't think the moves the fed is talking about this year and next amount to all that much. Ultimately, our economy is going to be WTC 7 in my opinion. Controlled demolition "that no one could have foreseen" ultimately blamed on jihadists.

    They don't want chaos in America on the level that some here fear. They want to boil the frog.

    In a few years perhaps when the currency has been significantly devalued and inflation takes it's toll, cities/states will be in bankruptcy territory, and liquidation of assets likely will take place to pay back the bankers, and we start all over again.

  4. #3
    Tiny move. I agree probably 0.1 percent. Then at least a few months before it changes again. Very slow, very small increases. It will have little if any impact on the economy (which is why it will be a small, slow move). There will be short term reactions for a few days perhaps but things will settle back down.
    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

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  5. #4
    Markets are behaving more erratically than normal. HFT/EFT... odds are going down on a rate hike. Went from 90 to 70.... not sure what its at now.
    There are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights. War for any other reason is simply a racket.
    -Major General Smedley Butler, USMC,
    Two-Time Congressional Medal of Honor Winner
    Author of, War is a Racket!

    It is not that I am mad, it is only that my head is different from yours.
    - Diogenes of Sinope

  6. #5
    I ain't buying it either. They will not raise rates now or ever. They're stuck in a trap of their own creation, and there's no end to the number of people who told them so all along.

  7. #6
    I still hold that they will raise, marginally, predictable market sell-off, followed by some QE...
    There are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights. War for any other reason is simply a racket.
    -Major General Smedley Butler, USMC,
    Two-Time Congressional Medal of Honor Winner
    Author of, War is a Racket!

    It is not that I am mad, it is only that my head is different from yours.
    - Diogenes of Sinope

  8. #7
    Quote Originally Posted by thoughtomator View Post
    I ain't buying it either. They will not raise rates now or ever. They're stuck in a trap of their own creation, and there's no end to the number of people who told them so all along.
    What he said. ^^^^

  9. #8
    Quote Originally Posted by timosman View Post
    What he said. ^^^^
    thirded
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken



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  11. #9
    Going to be just like the taper again. People will say they can't raise rates until they do, then people will move the goal posts to something else (raise rates to "normal" levels etc).

  12. #10
    Quote Originally Posted by jllundqu View Post
    I still hold that they will raise, marginally, predictable market sell-off, followed by some QE...
    The classic sign of inflation, the wage cost spiral just isn't happening, I see no real reason why they should..

    Wholesale natural gas just went under 2 bucks a mmbtu, coal is dirt cheap, crude oil, gasoline, and most importantly diesel are hitting multi year lows.. Those will all exert negative pressure on prices of just about everything as they work their way through the economy...
    Real estate is coming back, bit its hardly a bubble at this point..

    A rate increase really seems like a cure for a nonexistent problem at this point...
    Last edited by Dforkus; 12-14-2015 at 06:17 PM.

  13. #11
    Quote Originally Posted by jllundqu View Post
    Will they or won't they?
    Yes.

  14. #12
    I say no.....let's go negative rates
    "Liberty lies in the hearts of men and women; when it dies there, no constitution, no law, no court can save it; no constitution, no law, no court can even do much to help it."
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  15. #13
    They might raise it the tiniest amount possible just to save face, but I tend to doubt it. I would expect negative interest rates before significant rate hikes.

  16. #14
    Quote Originally Posted by puppetmaster View Post
    I say no.....let's go negative rates
    Last edited by timosman; 12-15-2015 at 12:23 AM.

  17. #15
    I guess , yes , .25 or less .

  18. #16
    Quote Originally Posted by Zippyjuan View Post
    Tiny move. I agree probably 0.1 percent. Then at least a few months before it changes again. Very slow, very small increases. It will have little if any impact on the economy (which is why it will be a small, slow move). There will be short term reactions for a few days perhaps but things will settle back down.
    If the economy is doing so well why are we not around 6% interest rate?


    Do we need more immigration to stimulate or grow the economy and pay the Medicare?
    Last edited by Danke; 12-15-2015 at 12:28 AM.
    Quote Originally Posted by Zippyjuan View Post
    Ron Paul know some weird people...



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  20. #17
    Quote Originally Posted by Danke View Post
    If the economy is doing so well why are we not around 6% interest rate?
    6% of $20T = $1.2T You do not want to bankrupt the government, do you?


    Do we need more immigration to stimulate or grow the economy and pay the Medicare?
    Yes, but we need to keep the interest rates low for this ponzi scheme to work.

  21. #18
    Quote Originally Posted by Danke View Post
    If the economy is doing so well why are we not around 6% interest rate?


    Do we need more immigration to stimulate or grow the economy and pay the Medicare?
    Which interest rates? There are literally thousands of interest rates. Short term rates. Bank deposit rates. Credit card rates. Long term rates. Mortgage rates. The Fed sets the rates at which banks can borrow money from them. But the general answer is that the rate of price inflation is so low. Basic rates take the expected rate of inflation during the loan period, add on their desired profit margin and probably kick in a "risk factor" for the likelyhood they get their money back. For rates to be six percent, inflation would need to be running about five percent.
    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

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  22. #19
    The Federal Reserve has all but broadcast its intention to hike its benchmark interest rate for the first time in nearly a decade come Wednesday, and most

    Fed watchers view an increase to 0.25% from the current zero percent


    a near certainty.
    an hour ago
    http://www.cbsnews.com/news/the-pros...est-rate-hike/

    'We endorse the idea of voluntarism; self-responsibility: Family, friends, and churches to solve problems, rather than saying that some monolithic government is going to make you take care of yourself and be a better person. It's a preposterous notion: It never worked, it never will. The government can't make you a better person; it can't make you follow good habits.' - Ron Paul 1988

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    ...the familiar ritual of institutional self-absolution...
    ...for protecting them, by mock trial, from punishment...


  23. #20
    The likely rate hike has been well choreographed. Markets were pricing in an 83% chance of a rate hike, as of Monday afternoon.
    4 hours ago
    http://www.marketwatch.com/story/wha...ion-2015-12-14

    'We endorse the idea of voluntarism; self-responsibility: Family, friends, and churches to solve problems, rather than saying that some monolithic government is going to make you take care of yourself and be a better person. It's a preposterous notion: It never worked, it never will. The government can't make you a better person; it can't make you follow good habits.' - Ron Paul 1988

    Awareness is the Root of Liberation Revolution is Action upon Revelation

    'Resistance and Disobedience in Economic Activity is the Most Moral Human Action Possible' - SEK3

    Flectere si nequeo superos, Acheronta movebo.

    ...the familiar ritual of institutional self-absolution...
    ...for protecting them, by mock trial, from punishment...


  24. #21
    Why the Bitcoin Price Chart Is Showing So Much Strength TodayMoney Morning‎ - 1 day ago
    Bitcoin Price Still Advancing On The Eve Of Rates HikeCryptoCoinsNews‎ - 4 hours ago


    China New Yaun Index * US Fed Rate Hike = USDCNY moon^2
    USDCNYmoon^2 * Bitcoin as Vehicle = BTCCNY^3


    Last edited by presence; 12-15-2015 at 02:15 PM.

    'We endorse the idea of voluntarism; self-responsibility: Family, friends, and churches to solve problems, rather than saying that some monolithic government is going to make you take care of yourself and be a better person. It's a preposterous notion: It never worked, it never will. The government can't make you a better person; it can't make you follow good habits.' - Ron Paul 1988

    Awareness is the Root of Liberation Revolution is Action upon Revelation

    'Resistance and Disobedience in Economic Activity is the Most Moral Human Action Possible' - SEK3

    Flectere si nequeo superos, Acheronta movebo.

    ...the familiar ritual of institutional self-absolution...
    ...for protecting them, by mock trial, from punishment...


  25. #22
    I'm guessing yes, as long as nothing crashes in the next 40 minutes.


    If they do "raise" rates, keep things in perspective. I don't even think .25% will show up on a long term chart. It's just a symbolic move. They need to get to 2 or 3% to claim they raised rates. Even 3% is historically very easy monetary policy.


  26. #23
    Here we go....
    There are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights. War for any other reason is simply a racket.
    -Major General Smedley Butler, USMC,
    Two-Time Congressional Medal of Honor Winner
    Author of, War is a Racket!

    It is not that I am mad, it is only that my head is different from yours.
    - Diogenes of Sinope

  27. #24
    How does an interest rate hike improve anything?



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  29. #25
    My favorite part is the market reaction to any announcement the Fed makes. It always looks like an earthquake on a seismograph.

  30. #26
    Quote Originally Posted by kfarnan View Post
    How does an interest rate hike improve anything?
    In the short term, it won't, but it will decrease the ability of people and governments to increase the amount of debt. Currently the rates are much lower than what the market would provide. If the Fed was able to guess the market rate for interest, they would do a lot less damage.
    "He's talkin' to his gut like it's a person!!" -me
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    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

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  31. #27
    http://www.marketwatch.com/story/fed...006-2015-12-16

    Federal Reserve lifts interest rates for first time since 2006

    WASHINGTON (MarketWatch) - The Federal Reserve voted unanimously on Wednesday to raise interest rates by a quarter point, marking the first increase in more than nine years. The bank raised its fed funds rate to a range of 0.25% to 0.5%, ending an unprecedented seven-year run of near-zero interest rates. The vote was 10-0. The board of directors also raised the discount rate to 1% from 0.75%. Looking ahead, the Fed said it will "carefully'monitor" actual inflation in light of 'current shortfall." And given current economic conditions, the bank said interest rates are only likely to increase in a "gradual" manner, ending up at a long-run target of 3.5%. That was unchanged from its September forecast.
    http://www.marketwatch.com/story/fed...016-2015-12-16

    Federal Reserve 'dot plot' still signals 4 interest-rate hikes in 2016


    WASHINGTON (MarketWatch) - The Federal Reserve's so-called dot plot signaled that the central bank still plans to increase interest rates four times in 2016, bringing its benchmark rate to a median of 1.4%. And the Fed's long-run goal of 3.5% remained the same. Yet the Fed also expects to act a bit less aggressively in 2017 and 2018. The bank sees the median fed funds rate at 2.4% at the end of 2017 vs. a prior forecast of 2.6%. The 2018 target was reduced a touch to 3.3% from 3.4%. Each dot in the dot plot reflects where individual members of the FOMC expect interest rates to end up at the end of the year.
    As of about fifteen minutes after the announcement, the DOW is up about 100 points on the day- which will make the third straight day this week with triple digit gains if it holds.
    Last edited by Zippyjuan; 12-16-2015 at 01:20 PM.
    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

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  32. #28

  33. #29
    Thanks Obama and all for turning this economy around -you were right all along.

    Amazing, you sign a climate agreement and the economy strengthens -they really are intertwined...

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  34. #30
    http://money.cnn.com/2015/12/15/news...tes/index.html

    The Fed's rate hike...in 2 minutes

    1. It's the first rate hike in nearly 10 years: This is the Fed's first rate increase since June 2006. Back then, the economy was hot: Unemployment was at 4.4%, and the housing bubble was about to burst. The Fed tried to cool it down by raising rates.

    2. It's a good sign for the economy: The rate increase is a signal that the U.S. central bank is confident about the strength of the economy and its ability to handle higher borrowing costs. It also shows how far the economy has come since the Great Recession ended in 2009, when unemployment hit 10%. Now it's at 5%.

    3. Interest rates are coming off zero: The Fed put rates near zero in December 2008 to boost the economy and stimulate the collapsed housing market. Rates haven't budged since then.

    4. The Fed wants to raise rates slowly: The Fed increased its target rate from near zero to 0.25%. That's a very small move. The Fed also said it expects to continue to raise rates at a slow, gradual pace next year.

    5. Savers will finally make a little money: If you put money in your savings account, you will slowly start to earn interest over the next couple years as rates start climbing higher. Savers haven't earned any interest since 2008.

    6. Higher rates are usually bad for stocks: But not always. When the Fed last raised rates between 2004 and 2006, the S&P 500 actually gained 15%. But higher rates increase how much it costs companies to borrow. And that can the economy to slow, which is not what stock markets want. On Wednesday, U.S. stocks went higher after the rate hike was announced.

    7. Home buyers, now's the time to pay attention: Mortgage rates won't skyrocket overnight but they are expected to start climbing. A typical rate on a 30-year mortgage is 3.9%. That's very low. In 2006, mortgage rates were above 6%.

    8. Higher rates will make the dollar stronger. A strong dollar is a nice perk for U.S. travelers but it's not good for American businesses, such as Apple (AAPL, Tech30) and Nike (NKE), that sell their products abroad. A strong dollar makes American products more expensive -- and less attractive -- to foreign shoppers.

    9. The Fed doesn't want to be late. The Fed doesn't want to hurt U.S. trade. Interest rates often take a few months to really have an impact on the economy. If it waited much longer, it runs the risk of an overheated economy.

    10. Almost everyone had expected a rate hike: Over 80% of traders expected the Fed to raise rates, according to a CME Group analysis.
    I don't expect much impact. The hike has been expected for several months and is already priced into things. That and the fact that the rate increase is so small.

    NOT raising them at this time would have impacted things- it would have signaled economic weakness.
    Last edited by Zippyjuan; 12-16-2015 at 02:08 PM.
    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    "Truth isn't truth"- Rudy Giuliani

    "China has total respect for Donald Trump and for Donald Trump's very, very large brain," - Donald Trump.

    I am Zippy and I approve of this post. But you don't have to.

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