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End To Us Rate Rises?

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WASHINGTON (MarketWatch) - Most members of the Federal Reserve Open Market Committee agreed that the Fed's recent chapter of steady rate hikes was coming to a close, according to a summary of the March 27-28 meeting released Tuesday. "Most members thought that the end of the tightening process was likely to be near and some expressed concerns about the dangers of tightening too much, given the lags in the effects of policy," the summary said. The Fed has hiked rates for 15 straight meetings, bringing rates back to 4.75% after hitting a low of 1.0% in the spring of 2004. During the discussion, Fed officials agreed "the effects on spending of the substantial increase in short-and intermediate-term rates since June 2004 had probably not yet been fully felt." The FOMC decided on March 28 to hike rates to check the upside risks of inflation. Some Fed officials wanted the change the policy statement released at the end of the meeting. "Several members were concerned that market participants might not fully appreciate the extent to which future policy action will depend on incoming economic data, especially when an end to the tightening process seems likely to be near," the summary said

FOMC Minutes

Markets could start to get interesting!

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The US hikes are lagging in their effect. THey may have already overdone it as their housing market is in trouble. All eyes on Japan now as their rates are what matter to the debtor nations.

http://today.reuters.com/investing/finance...UTES-URGENT.XML

The minutes said some members of the rate-setting FOMC were concerned about the risks of tightening too much, and that the impact from rate hikes since mid-2004 had probably not yet been fully felt.

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The effect of recent rate hikes may well be lagging but the same can be said of inflation. Remember the Fed minutes represent the thoughts of the entire committee thinking aloud. The consensus view will still be shaped by Bernanke and one or two other top dogs. The key data are the CPI tomorrow and the unemployment rate which is still falling.

To me these minutes are a reminder to markets not to look too far ahead given the hiking cycle is nearing it's end. That means rates could still climb a lot further if the future data warrants that.

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As long as the data remains strong the Fed will continue to increase rates.

And the data is strong - US consumer spending in March

Extract;

March was a good month at the cash tills for car dealers, furniture stores, building and garden centres, sports shops, book and music sellers and health and beauty retailers.

Total sales for the first three months of the year are now 8.3% up on the same period of 2005.

"Consumer spending is going to hang in stronger this quarter than a lot of people thought because of job and wage growth," Michael Gregory, a senior economist at investment bank BMO Nesbitt Burns in Toronto, said before the Commerce Department report.

"That's going to result in good performance for the US economy."

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I haven't been here long but have already pointed out several times that US rate rises would be stopping soon and falls were likely thereafter.

There is a hard core of people on here posting stuff about interest rates all the time to try to convince everyone else that rates here will go up and a house price crash will follow.

They could not be more wrong and I hope people here do not base their decisions on this biased and delusional view of the world. The western economies face ever increasing competition both from each other and from Asia. We are in for a long period of low interest rates which will be used to try to stimulate consumer demand. No government cares how much people borrow against the equity in their house as long as the economy stutters on and gets them re-elected.

The effect of this will be ongoing house price inflation. Not like that which has been seen in recent years, but you can dismiss any idea of a crash.

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We are in for a long period of low interest rates which will be used to try to stimulate consumer demand. No government cares how much people borrow against the equity in their house as long as the economy stutters on and gets them re-elected.

The effect of this will be ongoing house price inflation. Not like that which has been seen in recent years, but you can dismiss any idea of a crash.

That's ok then is it?

And what about this: US NATIONAL DEBT CLOCK

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That's ok then is it?

And what about this: US NATIONAL DEBT CLOCK

Who said it was okay? Not me. I am just calling things as I see them. I happen not to agree with the consensus on this site. That debt clock simply proves the point. With debt like that do you think the States will keep raising rates? Do you think they want to bankrupt whole swathes of their society? Look, they dropped rates after 9/11 to avoid a global recession. They have been raising them to keep people buying T bills. Simple fact is they are on a knife-edge, just like the UK. Medium term they are staying where they are or coming down a bit to stimulate demand when necessary.

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Who said it was okay? Not me. I am just calling things as I see them. I happen not to agree with the consensus on this site. That debt clock simply proves the point. With debt like that do you think the States will keep raising rates? Do you think they want to bankrupt whole swathes of their society? Look, they dropped rates after 9/11 to avoid a global recession. They have been raising them to keep people buying T bills. Simple fact is they are on a knife-edge, just like the UK. Medium term they are staying where they are or coming down a bit to stimulate demand when necessary.

The National Debt has to be funded and it is increasing by over $2,460,000,000 per day. The debt clock says everything there is to know about the US economy.

They can't fund this indefinetely. Dropping rates will be sign that they are giving up trying. They can't do that. They're screwed and they and you know it.

Have another look - US DEBT CLOCK - bet its gone up! Leave it a second then press refresh. Oh up again.

Seeing as you logged off I'll look again for you - 01:05am gone up $60,000,000 since I first posted this. Keep checking it out - it'll help to keep your views grounded.

Edited by Prude

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I haven't been here long but have already pointed out several times that US rate rises would be stopping soon and falls were likely thereafter.

There is a hard core of people on here posting stuff about interest rates all the time to try to convince everyone else that rates here will go up and a house price crash will follow.

They could not be more wrong and I hope people here do not base their decisions on this biased and delusional view of the world. The western economies face ever increasing competition both from each other and from Asia. We are in for a long period of low interest rates which will be used to try to stimulate consumer demand. No government cares how much people borrow against the equity in their house as long as the economy stutters on and gets them re-elected.

The effect of this will be ongoing house price inflation. Not like that which has been seen in recent years, but you can dismiss any idea of a crash.

with 1 in 20 Americans Upside down and drowning in a cesspoll of Negative Equity, you would think those geniuses would stop spending ?http://moneycentral.msn.com/content/Banking/Homefinancing/P148861.asp ? but with gold at 620$ and Oil 72$ and copper/silver prices frankly headed for the MOOOOOON do you want to cause the collapse of the dollar ? do you really ? choose:

a) rate cut. = prices get out of control the deficit gets wider dollar tanks. chinese get pissed off and sell. houseing plateus

B) do nothing

c) raise rates = induce recession, devalue dollar. get commodity prices under control. but importantly keep reserve currency status.

the printing press for the worlds reserve currency is THE most valuble thing in the world bar nothing. do not underestimate the lengths they will go to to keep it.

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Why else is the US is actively seeking another war for next year?

Ah, so, the Iranian president is an US puppet!

I was wondering why this guy so wants to nuke the middle east and why Iran is financing the islamist self-defense sucide bomb squads, who so ethically, in accord with the Geneva convention, blow up unsuspecting people in random places.

Must be that the USians are finally waking up to the truth of the 'Elders of Zion's Protocols' and are seeking a war with Israel by proxy! :ph34r:

----

The US isn't raising the rates further because the mayhem that would ensue is worse than the morass we're stuck in now.

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a) rate cut. = prices get out of control the deficit gets wider dollar tanks. chinese get pissed off and sell. houseing plateus

I assume you mean Chinese get pissed off and stop buying? T bills? Now if you hold a big lump of the world's reserve currency, why would you do something to cause it's value to drop? Why would you do something that would hurt your biggest export market? The Chinese and the Japanese have a massive vested interest in keeping the US economy bubbling along.

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I haven't been here long but have already pointed out several times that US rate rises would be stopping soon and falls were likely thereafter.

There is a hard core of people on here posting stuff about interest rates all the time to try to convince everyone else that rates here will go up and a house price crash will follow.

They could not be more wrong and I hope people here do not base their decisions on this biased and delusional view of the world. The western economies face ever increasing competition both from each other and from Asia. We are in for a long period of low interest rates which will be used to try to stimulate consumer demand. No government cares how much people borrow against the equity in their house as long as the economy stutters on and gets them re-elected.

The effect of this will be ongoing house price inflation. Not like that which has been seen in recent years, but you can dismiss any idea of a crash.

Mr Estate Agent, On the contrary, you can dismiss any idea of longer term gradual house price inflation. This is the largest asset bubble in history paid for on the never-never, unemployment is powering ahead, manufacturing is at crisis point, repossessions are soaring (yes soaring), bankruptcies are rocketing. Your faith in the analysis of vested interests journalism for your own financial survivability is touching, but mightily misplaced. The FTBs are either staying out or already emigrated. Prices in my area (South Somerset) have dropped 6% in 12 months and continue to drop, no one gets anywhere near asking price any more. People with their houses on the market at the moment are the office joke. And this is what the latest ar*sholes have called a ‘sellers market’.

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The National Debt has to be funded and it is increasing by over $2,460,000,000 per day. The debt clock says everything there is to know about the US economy.

They can't fund this indefinetely. Dropping rates will be sign that they are giving up trying. They can't do that. They're screwed and they and you know it.

Have another look - US DEBT CLOCK - bet its gone up! Leave it a second then press refresh. Oh up again.

Seeing as you logged off I'll look again for you - 01:05am gone up $60,000,000 since I first posted this. Keep checking it out - it'll help to keep your views grounded.

Just checked it again - up by $1,300,000,000 since 1am this morning. Take a look

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  • 301 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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