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Us Interest Rates Set May Have "a Lot Further To Go"

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old precedents don't apply to this tightening cycle, since it began from the lowest interest rates in almost half a century. All the Fed has done so far, Paulsen explains, "is reverse an abnormally loose monetary policy undertaken to avoid a severe deflationary downturn after the collapse of the Internet stock bubble." Without the Fed's "depression panic," short-term rates probably would have bottomed fairly close to where they are today. Essentially, the Fed has just now brought interest rates back to typical post-recession lows. "So I think the Fed will keep tightening, the economy will stay strong and take stock prices higher

Michael Darda, chief economist and director of research for MKM Partners, thinks there will be plenty of rate hikes and thus slower corporate earnings growth. He sees the S&P climbing to 1375 or so from its year-end 1248. "I'm more worried about inflation than most, and I think the Fed will go a lot further than many people expect," he says. "But if things turn out better, [the market] could move quite a bit more than that." Darda believes the huge surge in the price of gold last year--flirting with 25-year highs--presages a significant rise in inflation. He expects the core consumer price index (excluding volatile food and energy costs) to rise above 3 percent in 2006--it rose 2.1 percent during the past year--as the Fed moves the fed funds rate to over 5 percent.

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  • 308 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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