Wednesday, June 17, 2015

BREAKING Fed Signals Rate Moves This Year (Possibly Two Hikes!)

So much for the idea that the Fed is never going to raise rates and that they are about to launch a new round of Quantitative Easing.

In forecasts the Fed has just made public about its interest-rate outlook, 15 of 17 officials said they expected to start raising short-term interest rates before the end of 2015. The projections suggest officials are gravitating toward one, or maybe even two, quarter-percentage-point rate increases by the end of the year.



  1. hmm its not up to fed bosses, its up to people on a different street but i guessing everyone has already been sounded out.

  2. Bob,

    Did you still have Peter Schiff booked for the Wenzel Show? You mentioned in a prior blog post that the interview was scheduled to air 6/12. I'm still interested to hear both of your views more in-depth. While Schiff believes no interest rate hikes are coming, and QE IV is inevitable, he has acknowledged in a recent podcast that a couple of miniscule hikes are not outside the realm of possibility, until they ultimately have to reverse policy and then do QE IV when the markets react violently to the lack of liquidity and higher rates. It's a similar position to his belief on the taper, that he thought it was better from the Fed's perspective and credibility to continue to try to "talk the market" and never taper, than actually having to taper and then ultimately reverse policy. I think at this point the Fed's biggest fear is that we rollover into the bust cycle and a recession before rates even increase from 0%. Therefore, they're to get a couple of trivial hikes in before it happens.

  3. Every money center bank is insolvent if asset values decline. How long do you think Janet will keep interest rates even slightly higher if the stock market and real estate market tank? If the US Government has to divert more liquidity to debt service? Maybe asset values will not decline when interest rates go up. I think they will as incomes do not support the values. We will see. At least you are willing to make an unambiguous prediction based on your analysis.

  4. Gee, right in line with GS's prediction. Go ahead Fed, release the kraken!