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Fed Lifts Interest Rate To 3.75%

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Guest Charlie The Tramp

I am gobsmacked.

Thought they would have had a month of financial mourning due to Katrina.

Well it now looks as if the Fed are really not messing about and more hikes are yet to come. :(

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I am gobsmacked.

Thought they would have had a month of financial mourning due to Katrina.

Well it now looks as if the Fed are really not messing about and more hikes are yet to come.  :(

Statement was as before - accommodative and IRs rising at measured pace - expect to 4 - 4.5%.

Interesting one FOMC member voted against. Most unusual for dissent.

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The Pound is going to be the next casualty.

We can't drop rates while the yanks are raising theirs this fast.

Something is going to break.

I think the minutes of the last MPC meeting are out tomorrow, should provide some indication of the next move.

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I think the minutes of the last MPC meeting are out tomorrow, should provide some indication of the next move.

I doubt there will be any indication as it will merely be wait and see. The drop was a mistake as far as the BoE are concerned and they won't want to do anything until they can start reraising rates without looking foolish (probably in November).

As for the US I most admit I was expecting no change this month to give the rest of the US economy to recover from Katrina. Clearly the problems with the dollar are unavoidable.

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The markets were expecting an increase and the consensus is now for rates of between 4 and 4.5.

The FED have no choice right now. There is far too much money in supply and they must keep the dollar as strong as possible. They are massively in debt and are relying on foreign inflows of around 3 billion US per day to keep their heads above water. They also don't want oil priced in anything but USD.

On top of this; gold is rearing its head....

Unfortunately, New Orleans is a tragedy but a regional problem that came at a bad time. The US housing market is overheated but only in certain regions; this is the key difference between the US and the UK. If some entrepreneurs get burned in California, then no big shakes; a housing correction will help far more than it toasts.

The BOE and Gordon Brown now have the interesting problem....look to the US politically or to Europe economically...

Edited by Lord Lucan

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I think the minutes of the last MPC meeting are out tomorrow, should provide some indication of the next move.

in theory 4 members should have voted for a rise i.e. the 4 who previously voted for no change - anything less is a climb down in my opinion, especially when inflation is up again - on the usbject of which, it will be interesting to see if they give any indication of what level they are prepared to let inflation rise to and whether or not they still see the rise as temporary due to the oil price

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The markets were expecting an increase and the consensus is now for rates of between 4 and 4.5.

The FED have no choice right now. There is far too much money in supply and they must keep the dollar as strong as possible. They are massively in debt and are relying on foreign inflows of around 3 billion US per day to keep their heads above water. They also don't want oil priced in anything but USD.

Unfortunately, New Orleans is a tragedy but a regional problem ...........

Once the New Orleans insurance money feeds through into the economy the money supply situation will become even looser, adding weight to the Fed increases....

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Got to keep selling those bonds.

It's going to be expensive going to the Moon again.

Interestingly on Beeb, Radio 4 I think, this am, just caught a space expert on this who said he thinks going to the moon again is partly to do with iirc, Helium 3, which is plentiful on the Moon and is important for nuclear fusion.

Any of our energy experts care to comment?

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Any of our energy experts care to comment?

Yes. There's lots of Helium-3 on the moon... unfortunately it's spread across the surface, so you'd need to mine vast areas to extract enough to be useful. Not something that NASA will be doing any time in the next few decades, though it's possible a private company could manage it.

Quite frankly, the manned spaceflight side of NASA exists primarily to funnel pork to the aerospace industry and NASA workers: that's why they're still hanging on to the shuttle hardware to build their next generation of spacecraft... gotta keep all those KSC workers in jobs.

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  • 336 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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