However, the Fed’s internal “Dot Plot” survey shows Fed members believe three more hikes are coming in 2017. Yellen also discussed the “Dot Plot” in her news conference following the announcement.
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20 thoughts on “Fed Hikes, “Dot Plot” Shows 3 More Hikes in 2017: Live Press Conference at 2:30 EST”
Kreditanstaltsaid:
But we peasants are in a recession NOW (…and have been for years). Shouldn’t the Great Central Planners be LOWERING rates…? Someone, somewhere must like a strong dollar…
Kreditanstalt – you must have bought some assets. Most of the homeowners are already into low, low mortgages. They don’t have much left over to spend. Time to raise interest rates; the savers will now take over spending. God knows the savers have been bent over a barrel for the last what, eight years? Asset prices will fall, and then the savers will step in. It will all balance out.
This is exactly what the “alt” economists predicted over a year ago. But, they also all predict that this will be one of the Fed’s greatest blunders. It is now obvious to anyone who lives in the “real” economy that the Fed is hiking into weakness. And remember this, interest rates are rising with the Debt/GDP ratio at 107%, the highest since WWII.
[sarc] Yeah, wow, hold me back. I’m freaking ecstatic. [/sarc]
“Good news” will be when 1yr CDs get back to 5.25% which at this rate and with the pending deflationary bubble burst should be some time in their “dot plot” area marked “longer run” meaning 2030 as far as I’m concerned.
I hope they do it. They will completely destroy what is left of the economy. Every US city will end up looking like Detroit – maybe that is their game plan?
The natural interest rate, absent any Fed manipulation, would likely be at least 5-7 percent. Ergo, the closer they can get to that, the better off the economy is. Manipulated, artificial interest rates, are never, ever, ever, ever “good” for an economy.
In an “economy” where absolutely every conceivable useful activity have been starved to death in order to keep propping up pointless bubbles to make well connected mediocrities feel wealthy off of robbing the rest, the best thing that can happen, is for all the bubbles to simultaneously and instantaneously pop without any possibility of reversal. For the current “economy”, all known asset markets down 70% tomorrow, would by now be a very good thing. I’m sure it’s not the ideal thing, as there is bound to be differentiation, but certainly infinitely better than what we currently have.
Trump needs to get out in front of this in a big way and let the American people know in no uncertain terms that there’s only so much he can do to repair the economic damage from the last 20 years. He’s not a magician and can’t put the genie back into the bottle. Otherwise he’s going to end up being the fall guy and perceived (targeted) as the biggest White House failure since Herbert Hoover. The proactive damage control needs to begin before the damage becomes apparent to the common uninformed American. Reactive damage control will only get brushed aside as excuses and a failure to accept responsibility.
Come off it. There’s TONS he can do. It’s written all over the internet all the time.
He promised to back off of NATO, and he’s criticized expensive military programs. If one were really “America first” one could cut defense spending 50% and do no harm to security.
There isn’t enough space here to discuss health care spending, but we know the US spends 3x what other 1st world economies spend on health care.
There will be viscous fighting to cut anything, and both parties will be against it. Difficult but not impossible.
That’s the beauty of it. Neither party will concede economy will crash and everyone will be forced to accept a lower standard of living across the board. If Trump accepts blame that’s his mistake because the fault lines started in the 1970s not in the last month or whenever he won the election
You’re dreaming if you believe Trump can undo 25 years of metastatic economic damage and $20 trillion is national debt. And when it all goes south the progressives will blame the guy who just took the helm. And unless Trump heads them off at the pass and thinks proactively they’ll get away with it too.
Until today the Fed hasn’t raised interest rates for more than 10 years since 2006. And suddenly there’s talk of 3 hikes in 2017 under Trump’s watch? lol.
I believe the Fed has raised rates twice in the last few years … the first time they didn’t like the market results that followed, so they backed off on their plans (as suggested by earlier bubble charts) to keep raising rates, but then again they were likely in full Prop-Up-Obama mode … with Pres-elect Trump, I’m actually surprised they didn’t go 50bp in this latest move.
But we peasants are in a recession NOW (…and have been for years). Shouldn’t the Great Central Planners be LOWERING rates…? Someone, somewhere must like a strong dollar…
Lowering them to what? super-NIRP?
Kreditanstalt – you must have bought some assets. Most of the homeowners are already into low, low mortgages. They don’t have much left over to spend. Time to raise interest rates; the savers will now take over spending. God knows the savers have been bent over a barrel for the last what, eight years? Asset prices will fall, and then the savers will step in. It will all balance out.
Mish – why are you skeptical of 3 rate hikes in 2017? I would expect that the fed would be more than willing to do so under a Trump presidency…
So raise them 4 times in one year’s time (of a new political administration) instead of once last year once this year and one next…hmmm
$US spiked with the news.
Strong usd good for … uh, hhmm …. let me see ….
This is exactly what the “alt” economists predicted over a year ago. But, they also all predict that this will be one of the Fed’s greatest blunders. It is now obvious to anyone who lives in the “real” economy that the Fed is hiking into weakness. And remember this, interest rates are rising with the Debt/GDP ratio at 107%, the highest since WWII.
Good news for savers.
[sarc] Yeah, wow, hold me back. I’m freaking ecstatic. [/sarc]
“Good news” will be when 1yr CDs get back to 5.25% which at this rate and with the pending deflationary bubble burst should be some time in their “dot plot” area marked “longer run” meaning 2030 as far as I’m concerned.
Some banks are already raising CD interest rates. It isn’t much but it is a trend in the right direction.
A very, VERY slow trend that won’t last.
3 hikes in 2017 would crash the RE markets in several states.
Bubbles generally don’t gradually deflate. They pop.
I hope they do it. They will completely destroy what is left of the economy. Every US city will end up looking like Detroit – maybe that is their game plan?
The natural interest rate, absent any Fed manipulation, would likely be at least 5-7 percent. Ergo, the closer they can get to that, the better off the economy is. Manipulated, artificial interest rates, are never, ever, ever, ever “good” for an economy.
In an “economy” where absolutely every conceivable useful activity have been starved to death in order to keep propping up pointless bubbles to make well connected mediocrities feel wealthy off of robbing the rest, the best thing that can happen, is for all the bubbles to simultaneously and instantaneously pop without any possibility of reversal. For the current “economy”, all known asset markets down 70% tomorrow, would by now be a very good thing. I’m sure it’s not the ideal thing, as there is bound to be differentiation, but certainly infinitely better than what we currently have.
The historically low interest rates bankrupted pension funds.
Trump needs to get out in front of this in a big way and let the American people know in no uncertain terms that there’s only so much he can do to repair the economic damage from the last 20 years. He’s not a magician and can’t put the genie back into the bottle. Otherwise he’s going to end up being the fall guy and perceived (targeted) as the biggest White House failure since Herbert Hoover. The proactive damage control needs to begin before the damage becomes apparent to the common uninformed American. Reactive damage control will only get brushed aside as excuses and a failure to accept responsibility.
Come off it. There’s TONS he can do. It’s written all over the internet all the time.
He promised to back off of NATO, and he’s criticized expensive military programs. If one were really “America first” one could cut defense spending 50% and do no harm to security.
There isn’t enough space here to discuss health care spending, but we know the US spends 3x what other 1st world economies spend on health care.
There will be viscous fighting to cut anything, and both parties will be against it. Difficult but not impossible.
That’s the beauty of it. Neither party will concede economy will crash and everyone will be forced to accept a lower standard of living across the board. If Trump accepts blame that’s his mistake because the fault lines started in the 1970s not in the last month or whenever he won the election
You’re dreaming if you believe Trump can undo 25 years of metastatic economic damage and $20 trillion is national debt. And when it all goes south the progressives will blame the guy who just took the helm. And unless Trump heads them off at the pass and thinks proactively they’ll get away with it too.
Until today the Fed hasn’t raised interest rates for more than 10 years since 2006. And suddenly there’s talk of 3 hikes in 2017 under Trump’s watch? lol.
I believe the Fed has raised rates twice in the last few years … the first time they didn’t like the market results that followed, so they backed off on their plans (as suggested by earlier bubble charts) to keep raising rates, but then again they were likely in full Prop-Up-Obama mode … with Pres-elect Trump, I’m actually surprised they didn’t go 50bp in this latest move.