Its Up Up And Away

[Panda]

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 3-1/2 percent.

http://www.federalreserve.gov/boarddocs/pr...809/default.htm

Lovely Jubbly

[oracle]

no surprise there then...makes our cut even more shockingly out of step!!!

KEEP A CLOSE EYE ON UK INFLATION NUMBERS NOW!!!!....FACTORY INPUT PRICES ARE ALREADY UP BUT THIS WILL FILTER INTO CPI AT SOME POINT!!!!!

[New Darker Law]

no surprise there then...makes our cut even more shockingly out of step!!!

KEEP A CLOSE EYE ON UK INFLATION NUMBERS NOW!!!!....FACTORY INPUT PRICES ARE ALREADY UP BUT THIS WILL FILTER INTO CPI AT SOME POINT!!!!!

<{POST_SNAPBACK}>

Am I the only one who is a more than a little bit concerned about inflation?

I no longer believe the MPC when they say inflation is a priority.

I'm worried they will happily allow inflation to run riot and erode the huge debts/mortgages people find themselves in.

The only reassuring thing is that I doubt wages will keep pace.

Anybody want to chuck in their tuppence, I'd be very interested to hear how others see this?

NDL

[Levy process]

Am I the only one who is a more than a little bit concerned about inflation?

I no longer believe the MPC when they say inflation is a priority.

I'm worried they will happily allow inflation to run riot and erode the huge debts/mortgages people find themselves in.

The only reassuring thing is that I doubt wages will keep pace.

Anybody want to chuck in their tuppence, I'd be very interested to hear how others see this?

NDL

<{POST_SNAPBACK}>

It does seem strange that they have cut rates when inflation is much higher than when they were raising rates. But then, they may see it as being on target with inflation, and that a small downward correction is fine. Maybe they see the "cycle" that they want as fluctuating up and down by 0.5% say, rather than several percent as in the past. Maybe they think they have nearly settled down to their "perfect" rate which keeps inflation at 2%.

Don't know really, just an idea.

[Guest Bart of Darkness]

Don't know really, just an idea.

I think that's what Gordon Brown said as well.

[OnlyMe]

Inflation is and has been raging in a number of essentials.

The dam will break, not necessarily through higher rates, just simply that people will find they have no money left to spend at the end of the month when they have paid for the basics. I think it will affect businesses first.

[TW11]

Am I the only one who is a more than a little bit concerned about inflation?

I no longer believe the MPC when they say inflation is a priority.

I'm worried they will happily allow inflation to run riot and erode the huge debts/mortgages people find themselves in.

The only reassuring thing is that I doubt wages will keep pace.

Anybody want to chuck in their tuppence, I'd be very interested to hear how others see this?

NDL

<{POST_SNAPBACK}>

Me too mate. The MPC are spineless.

The next inflation report is out tomorrow. You'll know just how spineless they are then...

[Levy process]

I think that's what Gordon Brown said as well.

<{POST_SNAPBACK}>

Like it.

[sp1]

there had been two stong GBP falls around each of the previous two FED rate rises.

I was expecting a GBP sell off in the first two weeks of AUg.

Notice the market has airationally bulled GBP from 1.73 to 17.8.

BUt that fine cos realisation will come and the higher and longer it goes away from fundamentals the pore potential is stored for a big move.

UK sentiment has much further to fall as does the economy and when both go so will GBP will too.

One of the biggest flushes of this system can be when rates go up and fast to combat late cycle inflation. BUt you gotta get all the weak hand out before the next bull run..

[aclwalker]

Am I the only one who is a more than a little bit concerned about inflation?

I no longer believe the MPC when they say inflation is a priority.

I'm worried they will happily allow inflation to run riot and erode the huge debts/mortgages people find themselves in.

The only reassuring thing is that I doubt wages will keep pace.

Anybody want to chuck in their tuppence, I'd be very interested to hear how others see this?

NDL

<{POST_SNAPBACK}>

Maybe they are intending to raise them from now on and then say "Look we tried to help everyone out but those pesky Americans have ruined it.". Then they can raise rates having someone else to blame.

Or maybe their role is to be reactionary to inflation rather than proactive?

It will be interesting to see what they'll do when even the fiddled, sorry adjusted, inflation figures seriously breach what our 'prudent' chancellor is comfortable with.

[Levy process]

Maybe they are intending to raise them from now on and then say "Look we tried to help everyone out but those pesky Americans have ruined it.".  Then they can raise rates having someone else to blame.

Or maybe their role is to be reactionary to inflation rather than proactive?

It will be interesting to see what they'll do when even the fiddled, sorry adjusted, inflation figures seriously breach what our 'prudent' chancellor is comfortable with.

<{POST_SNAPBACK}>

The wheels are coming off the economy.

Edited August 9, 2005 by Levy process

[TW11]

The inflation that's in the pipeline is there for all to see but none of them want to be accused of administering the medicine. A nice clean cut excuse (like a plummetting pound at a time of record oil prices) is what they are waiting for.

Doesn't it take two years for rate movements to have an effect? If that's true then a rate cut really was a joke.

Edit: Actually this post is bollcks. The inflation isnt in the pipeline, its already here. They are now screwing the savers to protect the reckless.

Edited August 9, 2005 by TW11

[Dicky]

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 3-1/2 percent.

http://www.federalreserve.gov/boarddocs/pr...809/default.htm

Lovely Jubbly          

<{POST_SNAPBACK}>

The sh** going to really hit the fan next year when the US IR is 6% and we're at 4% and the £/$ falls to 1.40 and oil hits $80 a barrels, we'll be paying about £1.25 a litre at the pumps RPI will be knocking on the door of 4% and on every dart board across the land will be pictures of Tony the tit and Gorgon Clown, the wonder boys.

Edited August 9, 2005 by Dicky

[OnlyMe]

Blimey, hardly a flicker on oil (although everybody knew rates were going up). still you'd expect to see some pullback on oil after the last couple of days.

Says a couple of things maybe 1) that nobody belives this rate rise will stop demand and 2) that nobody believes that this rise is enough to quell the money pumping and inherant devaluing of the paper $.

More rises to come.

[Panda]

The sh** going to really hit the fan next year when the US IR is 6% and we're at 4% and the £/$ falls to 1.40 and oil hits $80 a barrels, we'll be paying about £1.25 a litre at the pumps RPI will be knocking on the door of 4% and on every dart board across the land will be pictures of Tony the tit and Gorgon Clown, the wonder boys.

<{POST_SNAPBACK}>

We are not alone

Me thinks; sooner or later the truth or the cream, will rise to the surface

How long can they hide the fact that we are all working longer hours for less money to pay out for an increased living cost

Kill debt, raise base rates stop prolonging the pain, just to help the big bullshitting jock, the worst chancellor has ever held the post.

[Milkshock]

We are not alone          

Me thinks; sooner or later the truth or the cream, will rise to the surface

How long can they hide the fact that we are all working longer hours for less money to pay out for an increased living cost

Kill debt, raise  base rates stop prolonging the pain, just to help the big bullshitting jock, the worst chancellor has ever held the post.      

<{POST_SNAPBACK}>

you answered your own question - we are working for less money. inflation is still not feeding through to wage increases. hence a potential reason not to increase rates.

Edited August 9, 2005 by Milkshock

[how much...?? you must be joking]

inflation is still not feeding through to wage increases.

<{POST_SNAPBACK}>

..maybe not in the private sector... but the public sector is roaring away...

[AgeingBabyBoomer]

Overheard a cnversation the other day (person involved was sitting on the pavement broadcasting it to onlookers and passers by)

She works in a finance company in the same office block as mine.

She was telling whoever that she had just got a pay rise (fiddles with several bags of shopping at feet , not groceries mind you, shoes, clothes etc)

Says to friend she just got a pay rise - basic goes from £6.50 (per hour) to £5.00, but comission rates are higher, therefore she will earn more..based on previous performance, of course

Sorry, but a drop in basic rate is a pay cut.

Also, if the credit starts to dry up, so will the phone calls, more pay cut.

She then goes on to enumerate the days 'bargains' picked up in town....

People are being ripped off like this and sold it as a pay rise.

ABB

[Panda]

you answered your own question - we are working for less money. inflation is still not feeding through to wage increases. hence a potential reason not to increase rates.

<{POST_SNAPBACK}>

Mork calling Milkshock come in Milkshock, what planet you on!!!!!!!!!!!!!!!!!!!

Rates should be around 5.25%, never should have touched 3.5% apart from the fact that Brown wanted a favour from merv the serv or the swerv.

Edited August 9, 2005 by Panda

[Milkshock]

..maybe not in the private sector... but the public sector is roaring away... 

<{POST_SNAPBACK}>

the public sector has managers on 30k in london. wages arent heavily weighted for london as they are in the private sector. i think wage increases in local govt were 4% last year? do you see this as a sign of rampant wage inflation??? LMAO

btw i am bearish on house prices i think they will fall 20-30% despite rate cuts to about 4% over the next 2-3 years

[treestump]

The sh** going to really hit the fan next year when the US IR is 6% and we're at 4% and the £/$ falls to 1.40 and oil hits $80 a barrels, we'll be paying about £1.25 a litre at the pumps RPI will be knocking on the door of 4% and on every dart board across the land will be pictures of Tony the tit and Gorgon Clown, the wonder boys.

<{POST_SNAPBACK}>

$1-40 to the pound please god. Cant we have it a little sooner.

[Milkshock]

Mork calling Milkshock come in Milkshock, what planet you on!!!!!!!!!!!!!!!!!!!  

Rates should be around 5.25%, never should      have touched 3.5% apart from the fact that Brown wanted a favour from merv the serv or the swerv.

<{POST_SNAPBACK}>

Panda I am as bearish on UK house prices as the next man, I just think they will fall regardless of interest rate cuts.

[Guest absolutezero]

I work in the public sector.

I'm a teacher.

My pay rise last year (and for the next few years) was lower than inflation.

Where does this misconception about the public sector come from?

As far as I know only the fat cats (in public and private sectors) are on huge pay rises.

[New Darker Law]

.... the big bullshitting jock.......

<{POST_SNAPBACK}>

His ethnicity has nothing to do with his bovine-defecating talents.

NDL

[Marina]

I work in the public sector.

I'm a teacher.

My pay rise last year (and for the next few years) was lower than inflation.

Where does this misconception about the public sector come from?

As far as I know only the fat cats (in public and private sectors) are on huge pay rises.

<{POST_SNAPBACK}>

You are regarded as the lowest of the low by this government, unable to even get more than 75% of kids reading by 11. Pull your socks up and you'll be taken more seriously by the Government.

Or, go on STRIKE. Now that would be nice. A public sector union on strike for say 6 weeks (but not in the summer holidays - no-one would notice!). The outcry would be massive and the true reason for the existence of schools - to provide day care for children while their parents work - would be revealed. Are you guys involved in the new 8 to 6 initiative - so children can have a crappy breakfast as well as lunch.