FEDERAL RESERVE HIKES INTEREST RATE - 0.25% is Second Move Since 2008 crisis
The Federal Reserve did the incoming Trump administration a favor by raising interest rates modestly Thursday and signaling further gradual rate hikes for 2017.
President Obama’s economy—the dearth of decent paying jobs in rust belt communities and stagnant living standards—helped Donald Trump to capture the White House.
Obama boosted taxes on small businesses and investors, imposed burdensome regulations and worked against U.S.-based manufacturers by appeasing China on trade and currency manipulation. He let the nation’s transportation systems and schools fall into terrible disrepair as he steered public resources into ill-conceived solar energy projects and the like, and cajoled states to divert money into health care programs made more expensive by the Affordable Care Act.
The consequences are all around us. Although consumers have been spending briskly for several years, too much of what they buy is imported, American exports are too expensive and shutting factories to leave for Mexico or Asia has become the business strategy of choice.The US Federal Reserve has raised its benchmark interest rate by 0.25%, only the second increase in a decade.
The central bank voted unanimously to raise the key rate to a range of 0.5% to 0.75%, citing a stronger economic growth and rising employment.
But the central bank said it expected the economy to need only "gradual" increases in the short term.
Fed chairwoman Janet Yellen said the economic outlook was "highly uncertain" and the rise was only a "modest shift".
However, the new Donald Trump administration could mean rates having to rise at a faster pace next year, she signalled at a news conference after the announcement.
The president-elect has promised policies to boost growth through tax cuts, spending and deregulation. We Are Being Set Up For Higher Interest Rates, A Major Recession And A Giant Stock Market Crash
Global bond investors have seen trillions of dollars of wealth wiped out since November 8th, and analysts are warning of another tough week ahead. Since Donald Trump’s victory on election night we have seen the worst bond crash in 15 years. "interest rate" savings credit debt U.S. USA America "United States" Economy Jobs Job Employment Inflation goal 2017 2018 performance stocks "stock market" trading gold usd "U.S. Dollar" forex "Forex trading" growth sale shopping income salary wealth business investment "credit card" loan "savings account" "bank account" silver "sell gold" "gold coin" "gold bar" "silver coins" bullion "bullion storage" vault profit news entertainment trends trending
Global bond investors have seen trillions of dollars of wealth wiped out since November 8th, and analysts are warning of another tough week ahead. The general consensus in the investing community is that a Trump administration will mean much higher inflation, and as a result investors are already starting to demand higher interest rates. Unfortunately for all of us, history has shown that higher interest rates always cause an economic slowdown. And this makes perfect sense, because economic activity naturally slows down when it becomes more expensive to borrow money. The Obama administration had already set up the next president for a major recession anyway, but now this bond crash threatens to bring it on sooner rather than later.
For those that are not familiar with the bond market, when yields go up bond prices go down. And when bond prices go down, that is bad news for economic growth. As I noted the other day, so many things in our financial system are tied to yields on U.S. Treasury notes. Just look at what is happening to mortgages
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Posted by Nicole Bourbaki