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Realistbear

"signs Everywhere That Inflation (is) On The Rise

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http://www.dfw.com/mld/dfw/business/14523441.htm

Posted on Sun, May. 07, 2006

Inflation hinders pause in rate hikes

By Eileen Alt Powell

The Associated Press

NEW YORK - Is it really time for the Federal Reserve to stop raising interest rates?
That's the question the markets have been grappling with since the Fed's new chairman, Ben Bernanke, told Congress late last month that the central bank may be ready to pause in its drive to raise short-term rates to head off inflation.
Yet no sooner had the markets absorbed that idea when suddenly there were signs everywhere that inflation was on the rise --
in prices paid for materials, in higher gasoline prices and in the sharp jump in workers' wages reported Friday by the Labor Department.
As a result, bond prices have been falling and market interest rates have been rising, with the yield on the benchmark 10-year Treasury bond touching a high of 5.17 percent this past week versus about 4.8 percent just a month ago. On Friday, the 10-year bond was yielding 5.11 percent.

Bernie's "pause" was a little premature?

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Gordon Brown and vested interests have tried to convince us that interest rates no longer move in cycles. Huh!

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The fallout from a falling dollar

Seems to imply US is nearing the end of their hikes - also mentions Bernanke may not have a choice in doing so because of other central banks raising rates and diversifying their foreign currency holding away from $US.

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The fallout from a falling dollar

Seems to imply US is nearing the end of their hikes - also mentions Bernanke may not have a choice in doing so because of other central banks raising rates and diversifying their foreign currency holding away from $US.

I think you've read that one incorrectly. Other central banks raising their interest rates puts more pressure on the FED to hike and with a devaluing currency, even more.

Ben ain't done yet.

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A few months back Soros said that he expected the Fed to raise rates to at least 4.75%, and that this would be enough to tip the country into recession.

And now it looks like rates are going to have to go higher.

Oh bummer...

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I think you've read that one incorrectly. Other central banks raising their interest rates puts more pressure on the FED to hike and with a devaluing currency, even more.

Ben ain't done yet.

No I read it correctly just wrote my summary badly :P

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while gold is still on the rise I think its a done deal that Ben will keep raising rates ...until the wheels really do come off in a very obvious way

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US economy firing on all cylinders: data

Not anything sensational by any means but seems to back up what was said before - Bernanke would like more freedom to be able to play with the rates but might find himself unable to do so with an apparently strengthening economy (as well as all the other issues)

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No I read it correctly just wrote my summary badly :P

Now you're starting to sound like Ben himself.....

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Now you're starting to sound like Ben himself.....

:P again. Let's hope he read things wrong huh? I thought the "pause" in hikes he seems to be after was possibly to help out sensitive assests such as houses but apparently they are going to "pause and assess"

Oops. My mistake. It is kind of to help housing. Or is that the other way around - falling house prices help curb growth?

EDIT [i guess it's the rising mortage payments (that are concomitant with falling house prices if affordability is stretched to a limit) that reduce growth.]

"There will be a housing-related slowdown, and it's right around the corner,'' said Maury Harris, chief U.S. economist at UBS Securities LLC in Stamford, Connecticut. ``It will be large enough to quash inflation fears'' that might prompt the Fed to keep raising rates, he said in an interview last week. UBS expects this week's increase to be the last this year."

Edited by algor

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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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