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Interest Hike Aug 2nd - Will They / Won't They?


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1 hour ago, rantnrave said:

Am left wondering what if the US starts cutting rates a year from now? Will this cycle of UK rate rises go beyond 1%?

Tough call. The Canadian dummy (or his successor) will slash rates and fire up the presses again at the first sniff of a US recession, absolutely guaranteed.

Edited by zugzwang
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1 minute ago, winkie said:

....is that good or bad?;)

Necessary. To keep the UK out of recession and prevent the debt/GDP ratio from racing off to infinity. After that it depends on how the money gets spent. Another round of props and kickbacks for the house builders and mortagage lenders, or a radical change of direction?

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27 minutes ago, zugzwang said:

Tough call. The Canadian dummy (or his successor) will slash rates and fire up the presses again at the first sniff of a US recession, absolutely guaranteed.

Don't see the US going into recession before Trumps re-election. Currently there has been 1.5 trillion of tax cuts (which he may have done a bit early) and there is a $300 billion Federal Budget increase coming in.

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6 minutes ago, zugzwang said:

Necessary. To keep the UK out of recession and prevent the debt/GDP ratio from racing off to infinity. After that it depends on how the money gets spent. Another round of props and kickbacks for the house builders and mortagage lenders, or a radical change of direction?

 

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1 minute ago, Gigantic Purple Slug said:

Don't see the US going into recession before Trumps re-election. Currently there has been 1.5 trillion of tax cuts (which he may have done a bit early) and there is a $300 billion Federal Budget increase coming in.

Early? I don't believe the US economy needs tax cuts at all! Red hot jobs market, red hot stock market, red hot housing market... the Fed miles behind the curve. Looks very much like 2005/6 again to me.

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1 minute ago, zugzwang said:

Early? I don't believe the US economy needs tax cuts at all! Red hot jobs market, red hot stock market, red hot housing market... the Fed miles behind the curve. Looks very much like 2005/6 again to me.

"too early" depends on whether you are trying to pump up the economy before an election.

I reckon what happens after December 2020 is someone elses business as far as he's concerned.

I think as politicians go Trump probably has less love for his party and their ongoing interests than pretty much any leader in the West. It really is all about him.

Edited by Gigantic Purple Slug
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2 hours ago, scottbeard said:

I feel like the main reason they've been raised today is to start building up a buffer that will allow them to cut rates again in 12-18 months' time when the next recession hits (as they inevitably do from time to time).

So rates up to 1% by the end of 2018, but could easily be back to 0.5% again by the end of 2019.

This. Building up a position to cut from as future stimulus. 

I read an article a few years ago that predicted the Fed would get to about 2% then it would be up/down by small increments. Could happen! 

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2 hours ago, scottbeard said:

I agree with you that I won't consider the 2007-08 financial crisis truly 'over' until we are in a situation of normalised interest rates.

However - technically - a recession is defined as two consecutive quarters of negative growth, and that's more what I meant by "when the next recession hits".

And those numbers aren't smoothed?? What happens to the Coefficient of Variation when you get closer to 0?.....supposedly we are much less than 0.5% 'growth' (puke word)....off target inflation, and only 3% salary growth.....according to Carnivals Inflation Comittee policy whatever...

4.2% unemployment is ********...with previously unemployed people who gave up looking for work, now double counted with two part-time jobs...(the real figure has been reportedly most likely between 14-21% in the UK)....weighting to 21%. 'Self-employed' in greater numbers, and bunch of 16/17 year olds with paper rounds. FFS

Its all big BS....we never came out of the mess, they just polarised it between rich and poor by throwing money at the corporations for free who just stuffed it in their own pockets....NO INVESTMENT.

For everyone you see doing 'well' there are probably 10 people suffering because of that.....people need to wake up fast. These clowns have sunk the ship and are shouting instructions from dry land.....

 

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58 minutes ago, Gigantic Purple Slug said:

"too early" depends on whether you are trying to pump up the economy before an election.

I reckon what happens after December 2020 is someone elses business as far as he's concerned.

I think as politicians go Trump probably has less love for his party and their ongoing interests than pretty much any leader in the West. It really is all about him.

Who? Jay Z, Dwayne "The Rock"? Not sure there are many people who could command the voter numbers that he did, even seasoned politicians, I reckon he will do another term, by then the Virtue Signallers/Remainers/ Snowflakes etc. should have all but given up their yapping.

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5 hours ago, spyguy said:

More subtle.

FED sets the risk free return on *all* money.

Other CB have to set their IR according to this - price takers not price makers.

BoE does have a choice - make sterling the #1 investment/trading currency.

Until then it has to suck up the FED base rates.

In all honesty I don't understand what the heck is going on. 

Beginning to understand more about it thanks to this place though.  What they do, not what they say.

 

 

 

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7 minutes ago, Maximus Skepticus said:

And those numbers aren't smoothed?? What happens to the Coefficient of Variation when you get closer to 0?.....supposedly we are much less than 0.5% 'growth' (puke word)....off target inflation, and only 3% salary growth.....according to Carnivals Inflation Comittee policy whatever...

4.2% unemployment is ********...with previously unemployed people who gave up looking for work, now double counted with two part-time jobs...(the real figure has been reportedly most likely between 14-21% in the UK)....weighting to 21%. 'Self-employed' in greater numbers, and bunch of 16/17 year olds with paper rounds. FFS

Its all big BS....we never came out of the mess, they just polarised it between rich and poor by throwing money at the corporations for free who just stuffed it in their own pockets....NO INVESTMENT.

For everyone you see doing 'well' there are probably 10 people suffering because of that.....people need to wake up fast. These clowns have sunk the ship and are shouting instructions from dry land.....

 

That is why JC will be the next PM.

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3 hours ago, dances with sheeple said:

And you are being shouted down by these people?  :lol:

Its gets better, the 50% one was correct by another saying it hasnt gone up 50%, it gone up by a third, "as 75/25 is 3 thus a third" ,so their mortgage will only go up by about £230

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54 minutes ago, disenfranchised said:

This. Building up a position to cut from as future stimulus. 

I read an article a few years ago that predicted the Fed would get to about 2% then it would be up/down by small increments. Could happen! 

Probably worth pointing out that increasing interest rates is not the only tightening that the fed is doing at the moment. Quantitative tightening is also going on. No such activity in the UK yet as far as I can see.

https://www.bloomberg.com/news/articles/2018-08-01/treasury-boosts-long-term-debt-sales-and-launches-two-month-bill

Good video here.

Edited by Gigantic Purple Slug
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2 minutes ago, dances with sheeple said:

That is why JC will be the next PM.

I'm afraid he is still unelectable as far as a significant proportion of the population are concerned. Look at the last election. The tories released a very poor manifesto (possibly their worst ever), Theresa May didn't even bother appearing on the TV debates and they still won. Labour should have walked it. They didn't. 

For me, it's not so much Jezza that puts me off but those around him; the John McDonnells (Marxist by his own admission) and Emily Thornberrys (champagne socialists) of this world. I am sure Jezza is a lovely, genuine bloke, absolutely with his heart in the right place but, for me at least, it's clear that he is simply not a "leader" in any sense of the word.   

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4 hours ago, Monkey said:

Lunch time chat, very glum, couple of BTLers and some mortgagees... not really understanding.

One thinks their £700pcm mortgage payment will go up by £350 as the BOE IR has gone up by 50%... 

When i said that i'd preffer inflation lower and IRs higher i got shouted down, being told i dont know what i was talking about, and that i shouldnt comment on thr ecconomy as i dont 'own' a house. 

You'll know more than most homeowners if you read things on here. My colleagues wonder why and how I know so much about the housing/btl "market".

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48 minutes ago, Monkey said:

Its gets better, the 50% one was correct by another saying it hasnt gone up 50%, it gone up by a third, "as 75/25 is 3 thus a third" ,so their mortgage will only go up by about £230

The scariest thing is that even thinking that is how rates affect mortgages they still took out mortgages :o or maybe that logic is what underpinned their "Rates will never/can`t rise" belief? You should put them straight about how their interest rate rise will affect them (it is miniscule for most people) and then take no more guff whatsoever from them about economics or anything to do with finance.

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6 hours ago, Scunnered said:

Gosh!  Another 5 years and rates might make it into single figures.

 

Or a hard BREXIT panic will get us to high single figures in a matter of days... :D

Are they concerned about a run on Sterling given hard BREXIT, or will they let it crash & burn so Britain finally becomes competitive again?  Little bit of hyper-inflation with stagnangt incomes, and BMW and all the others will continue to produce in the UK, I would guess. Better than China, or Greece.

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