FMOC / Fed rate decision Dec 2015


jack

Administrator
Staff member
And we have a rate raise... so political, the data didn't back it up.

Part of me was hoping for a no-raise just to shake things up, since most large players were on the 'rise' side of the bet.
 

Peterma

Well-Known Member
Yep, four more to go - possibly/probably, a whole year's debate up ahead.

They all voted for it, some guys are seeing that as important, very hawkish, I am not so surprised that the rest all fell in, imagine the chair "now guys, this is the most important statement in many years, the US, indeed the entire free world needs to see that we are united with one voice, so you guys sulking down the back, shut the grumbling and get that yes in here now".

(just sent that note to M Draghi in how to run a committee in a CB ):)
 

sqa

Village Scribe
It's a lot more complex than just the numbers aren't there.

The "numbers", as generally understood, said they should have been raising a couple years ago. The reality is even more annoying than that: much of the persistent problems with the modern economies is... because of the Low Rates. When rates are too low, all sorts of negative consequences add up. (Watch for a complete collapse in a lot of Risk Assets over the next year, as we're at the end of a business cycle) You very quickly are trapped like the Japanese have been, the Europeans are and the Americans are trying to avoid.

The core of all of this is that everyone has too much Debt and the deleveraging process is painful, but it has been constantly pushed off. Because it would have ensured a different outcome in previous elections and would require "painful" cuts in social spending. Granted, no one has actually *done* austerity in their budgeting yet, they just complain about it.
 

shopster

Well-Known Member
Danielle DiMartino Booth used to work at the Dallas Fed for Richard Fisher.

Danielle weaves a story about what will really happen over the coming year, based on her knowledge of what Fed members are likely to do and what the markets may force them to do.

the smart $ is on a reversal to zero first.

s

http://dimartinobooth.com/the-fed-awakens/
 

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sqa

Village Scribe
The Bank of Japan raised rates back in 2001. It lasted I believe 7 months before they cut again.

Granted, only an idiot (or a central banker, but I repeat myself) doesn't get that there are "too low" of rates and we hit that a while ago. There is only so much effective risk to be taken within an economy. Moving the rates into the "funny money" range won't increase that. It only makes the next crash worse.
 

helly

Member
already last year were announced three rate hikes. In the end we only saw 1 in December.

I do not think that in 2017 will be able to raise more than twice the interest rate. Maybe...
 

the golden gun

RINSE & REPEAT
helly said:
already last year were announced three rate hikes. In the end we only saw 1 in December.

I do not think that in 2017 will be able to raise more than twice the interest rate. Maybe...
you think too much.
 

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