Tuesday, July 12, 2016

BREAKING 6 Fed Banks Wanted Rate Hike in June

So  much for the idea that the December Fed rate hike was going to crash the economy and that the Fed would have to reverse the hike and go negative on rates.

Half of the Federal Reserve banks wanted a 0.25 percent hike in the discount rate in June, reports CNBC.

I have refrained, following the the December 2015 rate hike, from making an exact forecast as to when the Fed will next raise rates, but they will.

The Federal Reserve banks of Boston, Richmond, St. Louis, Cleveland, Kansas City and San Francisco all called for a June rate hike.

 -RW

6 comments:

  1. Those banks wanted a hike in the discount rate, not the Fed funds rate. When people talk about the Fed "hiking rates" at the FOMC meeting they're talking about the Fed funds rate unless otherwise specified.

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    1. Section 19 of the Federal Reserve Act only stipulates that Fed branches can request an increase in the discount rate (Not the Fed Funds rate). It is commonly understood that branches requesting an increase in the discount rate are signalling to the FOMC that they want all Fed rates higher--including the Fed Funds rate.

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  2. wake me up when they actually do it

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    1. Yes, it is obvious you are sleeping. We know.

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  3. A broken clock is right twice a day. One day Wenzel will catch up to that clock!

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  4. As a saver I want the financial repression to end but I don't see it ending any time soon. Short of a crisis that forces a substantial hike in rates or a tiny elite having nothing left to buy there might not even be an ending over the horizon. A privileged class as become accustomed to free money and so has government. The fed might raise rates 0.25% a year for four or five years but that's still essentially free money. Then there will be an excuse to go down then up then down again... free money forever or until something breaks.

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