Feds Likely to Raise Rates - Yawn?

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MakeMe$$$$
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Feds Likely to Raise Rates - Yawn?

Post by MakeMe$$$$ »

http://money.cnn.com/2017/11/27/news/ec ... tml?iid=EL

The above article has its obligatory political discussions but...my point is that it seems to support some other articles I've read that the Feds will raise rates before December is out. So...

Is this a big yawner? Do the markets have this already baked into the cake? Does this mean that when the Feds make an official announcement on Wednesday that we won't see much of a reaction?
Don
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skiehawk11
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Re: Feds Likely to Raise Rates - Yawn?

Post by skiehawk11 »

My personal opinion is that if the Fed continues to raise rates, it needs to be done slowly and consistently. Large and/or unexpected increases stresses the system. Like anything, it takes a while for the impact of increased rates to trickle through the economy.

crondanet5
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Re: Feds Likely to Raise Rates - Yawn?

Post by crondanet5 »

Every time they raise rates they have to pay more interest on the national debt. So I think they will be very slow to raise rates. And what rising interest rate influencers dictate that rates should rise?

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Aitrus
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Re: Feds Likely to Raise Rates - Yawn?

Post by Aitrus »

crondanet5 wrote:Every time they raise rates they have to pay more interest on the national debt. So I think they will be very slow to raise rates. And what rising interest rate influencers dictate that rates should rise?
Keep in mind that the Fed is a private institution. When the US borrows money, they do it in large part through the Fed, and at rates the Fed sets themselves. When the Fed raises rates, the US has to pay more in interest back to the Fed itself.
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skiehawk11
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Re: Feds Likely to Raise Rates - Yawn?

Post by skiehawk11 »

I disagree that the Federal Reserve is a private institution. It is a public-private banking system.

In my humble opinion, understanding how the Fed works is vital to understanding how the economy works. The article below summarizes some quick points about the Fed:

https://www.pragcap.com/common-myths-ab ... l-reserve/

crondanet5
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Re: Feds Likely to Raise Rates - Yawn?

Post by crondanet5 »

While I am not a conservative Republican, have you ever thought about the public debt every city and town carry in addition to the federal debt? We truly are a nation of debtors with no solution in sight. To try and reduce this debt should be a good thing, but let us remember other countries provide needed health and education services at no cost. So why don't we? Reducing these costs is not the solution. Close monitoring of these costs helps reduce fraud and waste, but keep our citizens healthy. Remember that intelligence is not hereditary: it is random. So the next genius may come from a slum and rescued from death through a state health care coverage program. The Medicare system would save a bunch of medical expense if more people were covered by it as primary insurance carrier. Then have a second health insurance to pay what Medicare does not. I saw an interesting article that debt collections are tied primarily with those who do not have health insurance and get caught with a big unexpected medical bill. So keep as many forms of health insurance as you can. I have three. Tractor I hope you read this before you retire 12/31.

Scorpio70
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Re: Feds Likely to Raise Rates - Yawn?

Post by Scorpio70 »

Shoot. Eventually the debt will be unmanageable.

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Aitrus
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Re: Feds Likely to Raise Rates - Yawn?

Post by Aitrus »

skiehawk11 wrote:I disagree that the Federal Reserve is a private institution. It is a public-private banking system.

In my humble opinion, understanding how the Fed works is vital to understanding how the economy works. The article below summarizes some quick points about the Fed:

https://www.pragcap.com/common-myths-ab ... l-reserve/
Interesting reading, and the waters are indeed murky. In the end, however, I maintain my position. The Federal Reserve is 100% owned by private banks, who are themselves owned by individual shareholders. The fact that Congress enacted this entity under these conditions in 1913 through legislation does not in and of itself make this this entity a part of the Federal Government.

https://www.globalresearch.ca/who-owns- ... erve/10489

Also, see Lewis vs United States, June 24, 1982

"Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities for purposes of the FTCA, but are independent, privately owned and locally controlled corporations."

https://law.justia.com/cases/federal/ap ... 39/200393/
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MakeMe$$$$
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Re: Feds Likely to Raise Rates - Yawn?

Post by MakeMe$$$$ »

My OP was more or less directed at the current aspects of the rate hike. We all know that there is a fair amount of volatility in the markets. Is the rate hike already factored in or will we see more fuel to the volatility we are seeing?

My gut feeling is that the rate hike is actually the only current event that was predictable and won't really be a serious bump in things for now. But, its impact could get buried in the current volatility. However, I certainly can see that the affects of rate hikes could have a slow but longer term impact on things.

I/We will see.
Don
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Aitrus
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Re: Feds Likely to Raise Rates - Yawn?

Post by Aitrus »

I agree. Either way it goes, I don't think that there will be much impact on the markets. I think that in the next few weeks, earnings reports, tax reform and the new 22 Dec budget deadline will play a bigger role.

I think that, given history and this current Congress, that it will result in a good Santa Rally this year.

Apologies for dragging this thread off-topic.
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Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
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skiehawk11
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Re: Feds Likely to Raise Rates - Yawn?

Post by skiehawk11 »

Aitrus wrote:I agree. Either way it goes, I don't think that there will be much impact on the markets. I think that in the next few weeks, earnings reports, tax reform and the new 22 Dec budget deadline will play a bigger role.

I think that, given history and this current Congress, that it will result in a good Santa Rally this year.

Apologies for dragging this thread off-topic.
My apologies as well. Aitrus and I like to bicker like an old couple in random threads. :)

cashworth
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Re: Feds Likely to Raise Rates - Yawn?

Post by cashworth »

Bickering aside, there's value here. The pragcap write up Skie posted has a statement that's right on point IMO.

"Therefore, when inflation is low we will tend to find that interest rates are also low. When the economy heats up the Fed will generally raise rates in tandem to help dampen the risk of an irrational boom. What looks like “manipulation” or control is really more like a man chasing a dog on a leash."

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Aitrus
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Re: Feds Likely to Raise Rates - Yawn?

Post by Aitrus »

Yep. We're like a couple of grumpy old men. We spend most of our time at the local diner sipping coffee, griping about everything from politics to movies while we play chess or checkers and put money in the "Cussin' Jar" when we lose our tempers.
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Re: Feds Likely to Raise Rates - Yawn?

Post by mjedlin66 »

I believe that the markets care less about what the fed is doing than they did last year. Markets are growing because the economy is growing. Fed be damned.
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Aitrus
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Re: Feds Likely to Raise Rates - Yawn?

Post by Aitrus »

That's my read on the market as well, MJ.
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Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
"It's not what happens to you, but how you react to it that matters" Epictetus

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