Is that so ? A rate hike....there were suppose to be 4 rate hikes this year in 2016...so far there have been none...zero rate hikes and 2 more meetings, one in November the next in December... There is noooo way possible they hike in November around the election and then in Dec I'm sure the markets will whine like a little bitch and start to sell off just ahead of the Dec meeting giving yellen and friends the excuse to wait until 2017 to raise and just like that the fed will have gone an entire year with no rate hike and just a bunch of lies......if the economy is doing so well and the markets at historical highs how come a simple 0.25% rate hike hasn't happened....whats the hold up, oh 2% inflation hasn't been recorded yet and we haven't gotten to 2% unemployment... Are those the two golden answers to a rate hike? How perfect does everything have to align in order to get this great gigantic magnificent 0.25% rate hike...you just have to laugh and laugh and laugh...this is actually worse than that childhood story we all know so well, the boy who cried wolf...yea that story is more believable than this pathetic fed... http://www.cnbc.com/2016/09/21/feds-yellen-i-would-expect-to-see-a-rate-hike-this-year.html
If it isn't obvious by now they are monetizing the existence of the USA, if it weren't for the printing and we tried to balance budget. USA would look a lot like Mexico. The Japanese are more blatantly obvious about it. Equity markets will be 'owned' by the FED. Today's reaction in futures is classic. There were no true buyers, it was FOMC sponsored algo implemented by colluding trading houses.
In the late 80's Japan was in what was called the 'miracle economy" driven by loose monetary policy and dominating the electronics and auto industries - robotic manufacturing - surging productivity. The Nikkei and real estate soared, personal savings were the highest on the planet - what could possibly go wrong? Interest rates! When the interest rates were raised the Nikkei crashed losing 50% in 1990 than went into a 2 decade bear market that knocked it down to only 25% of it's 80's peak, Tokyo real estate was down 90%. Ohhh, but that could not ever happen here you say. What is driving our bubble? Nothing but the expansion of debt, and don't forget Japan had a lot of cash saved, unlike here were have a very low savings rate. Just food 4 thought.
During the news conference I heard Yellen stated that monetary policy is not influenced by politics. That's a joke. She's a puppet of Washington politics. Independent body...give me a freakin break. Once confidence is lost in the world central bankers, and I believe that is already starting to happen, the market will come unwound quickly. US like Japan will have no choice but to default on their debt or ask debt holders to take a haircut. Either way this story will not end well.
If I'm a betting man... I'd bet we'll see a hike rate in December after the election if Trump wins. If Hilary wins we won't see any rate hike for awhile... Just a hunch. No way of ever knowing though.
Yeah, I heard that too. Somebody pointed out that Trump has accused the Fed of keeping interest rates low, to keep the market strong in support of the Dems. The implication is that they're manipulating the market for a Hillary victory. She responded by firmly stating that partisan politics is not on their agenda.
If interest rates were artificial, the long end of the curve would not be at where it is today. The weak summer data that has been rolling in almost guarantees the Fed will be a nonfactor in December. There's no way the economy will soar in the next 2 months to provoke a hike. The rate hike talk appears to be aimed at keeping the dollar in a relatively small trading band.
There is another factor that doesn't get much attention, but it is something that the Fed has to consider. And that is where the dollar is trading relative to the currencies of our trading partners and what the current policy of our trading partner's central banks is. I think the Fed is wise to allow more time to see how the current initiatives of the European and Japanese Central Banks is playing out. When the Bretton Woods Accord was still in effect, moves in currencies were controlled and coordinated. Since the gold standard can no longer be maintained, an effective, official currency accord among the worlds major countries is lacking. Although some believe free markets in fiat currencies will result in currencies being fairly valued, this idea seems to be based on a misconception. It assumes currency markets, if left alone, will spontaneously move toward equilibrium, and fair valuation. Unregulated markets in other areas have already proved to be incapable spontaneously moving, even most of the time, toward equilibrium, as predicted by classical economic theory. International regulation of fiat currencies is probably going to be needed, but doesn't exist. See for example George Soros' remarks (late 2009) Re this issue here:
Yellen on Capitol Hill was asked today how much it would cost to break up per bank using FSOC, she said she had no idea. Then she was told that her staff at the Fed calculated $60mn, and she said she had no idea how her staff came up with that number. It's also quite interesting to hear that an acting Fed governor gave a large donation to Clinton and was anchoring for a top job in her staff if she won, and did not recuse or was not asked to be recuse her position on the board. Then, the stability test costs are directly passed on to the banks which opens up the possibility of conflict of interest. Now people could liken it to CDS and rating agencies, but of course everyone learns from material mistakes in the system. Or do they just find a better way not to get caught the next time. And people think the Fed have a clue what they are doing.