When will the Fed, raise interest rates? (dollar, economy, financial)
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When will the Federal Reserve raise interest rates, to prevent a train wreck and worthless paper?
It will be after the 2012 elections that is the only thing I think is a sure bet. I do not see it happening until the economy really shows a lot of signs of growth. That could be awhile even with a {R} in the big chair, also consider all the volume of unsold homes and foreclosures.
The rates won't rise as long as the European Euro stays as weak as it now is. The dollar is once again looking very sound against the falling Euro, and the vastly under-valued Yuan.
The housing industry troubles are still a long way from being fixed, and once that happens, the housing market will regain it's feet much more quickly while the rates are as low as they now are.
Inflating the dollar would only set all this back severely, and all financial and economic experts agree on this. Once the housing logjam is broken, the banks will start moving the money around again. We don't need more money- we only need the money we already have to start going back to work once more.
i agree that raising interest rates right now is going to hurt the economy, regardless of who sits in the big chair, but it may be a necessary evil that will have long term benefits for the economy.
Very interesting commentary here, although I wish more people could see the fact that it's not just inflation that needs to be tamed, but savings that need to be stimulated. Savings and subsequent investment in productive capacity is the only thing that's going to get us out of this mess.
So, what should interest rates be set at? 10%, 15%, anyone? Too bad Paul Volcker isn't around today...
imo, the prime lending interest rates need to be around 6-8% for a healthy economy. less than that and we dont get anywhere, more than that and we get more stagflation with a healthy dose of recession.
Its going to slow the economy when it happens, so look for it in and around August of 2013.
very true, but it will "prime the pump" by getting more savings because of higher interest rates paid to savings accounts. it will also allow banks to make money on loans that they dont make now, and perhaps reduce or eliminate many of the fees they charge otherwise.
very true, but it will "prime the pump" by getting more savings because of higher interest rates paid to savings accounts. it will also allow banks to make money on loans that they dont make now, and perhaps reduce or eliminate many of the fees they charge otherwise.
Savings rates have been on the rise. I believe personal savings increased last year by like 25% nationally.
I think interest rates have long been overdue for an increase personally. The constant lowering of interest rates is what floated the economy from 1981 until 2005. When we couldn't lower them anymore to keep the economy over, well, oops. And when the economy crashes, home interest rates go up also.
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