Fed Raises Interest Rates for First Time in Nearly 10 Years

The quarter-point hike in the federal funds rate still leaves interest rates only slightly above near-zero levels. But the move shows the central bank believes the U.S. economy has recovered enough from the 2008 financial crisis to start moving rates back to "normal" levels.

Fed Raises Interest Rates for First Time in Nearly 10 Years



The reign of Janet Yellen has begun in earnest.

The 2008 financial crisis is finally over.

And the Petrodollar once again will be supreme.


Seven years.
Seven long years.

The wealth confiscation is over.
It's back to business as usual.

So... how is everyone enjoying their new peasant status in the New World Order?


Mike Grouchy

OIl is dancing crazy on the chart.Don't know about other commodities.Market is really volatile right now.

a reply to: mikegrouchy

But the move shows the central bank believes the U.S. economy has recovered enough from the 2008 financial crisis to start moving rates back to "normal" levels.

Thats not what I heard why they are doing that. The 'enforced' stagnation of the economy can't be hidden any longer, so they are raising interest rates (god forbid, money out of their pocket) as a last resort to make it appear as though the economy is improving.

Juuustt before THE shopping holiday of the year. Anyway, its an announcement they are going to do it… to get you to "pretty please, buy more stuuuff" (insert whining noises).

About time.
The economy will never rebound with extremely low interest rates.

a reply to: intrptr

Yup.

If you needed any more proof that The Fed is complicit in the health of major lenders...this is it. They are creating an urgency to spend that will cause year end credit balances to be at an artificial high, meanwhile retailers will be sitting waaaaaay up there on those fat stacks of cash.

This is a maneuver to create more spending. Squeeze a few more cents out of those aching budgets.

This will begin to affect student loans, variable rate mortgages, late fees, credit cards, the lot.

a reply to: mikegrouchy

Ha! Beat me to it.
The US Chief economist for Goldman Sachs, Jan Hatzius, predicts 4 more hikes this coming year.

First, he asks why the Fed will be hiking when there is "only moderate growth in the economy as a whole, stagnation in the industrial sector, and an uncertain global environment?"

The reason, he said:

Is that although the funds rate has been stuck at zero for seven years, a lot has happened "under the surface". Exhibit 9 shows the federal funds rate and the policy prescriptions from a range of Taylor Rules. For several years after the recession, most standard policy rules said the FOMC should cut rates well below zero, if that were possible. Now, because of the cumulative progress the economy has made since 2009, even relatively cautious versions of the Taylor Rule call for raising the funds rate sometime soon. The rule that we think best describes Fed Chair Yellen's views—which uses the U6 unemployment gap and a zero equilibrium funds rate — says the FOMC should hike at the December or January meeting, if taken literally. Thus, the same basic framework that has kept the Fed at zero — and that has guided our relatively dovish policy views — now suggests the process of normalization should begin.

Business Insider Link

a reply to: mikegrouchy

And as usual the consumer and tax payer will be the only one that will be screw as always.

Hail to the kings.

a reply to: mikegrouchy

The major banks will be dancing around the campfire.

Expect greater fees due to 'recorrectioning' and other such financial gobbledygook.

Watch for the inflation ...

a reply to: ketsuko

Bingo!!!!!!!!!, wait when it starts to hit the consumers, I expect people to hold more to what they have, rather than going on shopping sprees.

a reply to: mikegrouchy

Can someone PLEASE spell out for me what this means to regular Joe Schmoe?

Does it mean companies have to pay more, so we also have to pay more?

I don't quite get it :/

originally posted by: marg6043
a reply to: mikegrouchy

And as usual the consumer and tax payer will be the only one that will be screw as always.

Hail to the kings.

Not only that. How much blood have we seen in public over the last ten years. Is that finally over too. Are great swaths of Americans suddenly going to be hired, and have enough speculative income to buy a few stocks. Really by-in to the American dream?

Or are most Americans still "off the books" since they are no longer even looking for a job.


Mike Grouchy

originally posted by: FamCore
a reply to: mikegrouchy

Can someone PLEASE spell out for me what this means to regular Joe Schmoe?

Does it mean companies have to pay more, so we also have to pay more?

I don't quite get it :/

I'm just taking a guess, but In your case it could mean that the bank now will start offering loans especially when you didn't ask for one like the fast ole days of the two thousands.

Pop culture will start to become more credible as a shadow effect.

/sarc
WHOOOO HOOOO debt servitude!!111 Ride it till the remaining rims come off!
/end sarc


Mike Grouchy

a reply to: mikegrouchy

So the banks (and shareholders of the banks) want us to borrow more money so they can screw us and make a pretty penny?

I've always been weary about borrowing anyway.

Thanks for sharing your knowledge MG

a reply to: FamCore

It means that it will cost you more to finance anything, including a home, a car and those pesky credit cards, it means less money in your pocket to pay bills.

Taking into consideration that most people live in fix incomes this increase in interest rates are going to have a negative impact on them.

If you live from payday to payday you will have to either get a second job of cut your basic needs like food and medicine to pay for what will become more expensive to get.

While this is good for the banks it affects the economy negatively as people stop spending in order to pay more on the interest in their bills, when it happens two consecutive quarters is call "contraction".

Interest rates hike are not suppose to be so bad if the regular consumer was stable and doing good, but that is far from reality.

Man this thing is blowing up on twitter. From 5 posts, to 15, 35, 85. It's like every financial blog in cyberspace suddenly beeb'd and stirred to life.

Fresh news is still spreading it seems. I can imagine that guy I used to watch on CNN/FOX? (it has been about ten years), the one with all the toys and sound effects, uh Kramer, Cramer? Screaming "buy buy buy".


Mike Grouchy

originally posted by: ketsuko
Watch for the inflation …

Exactly, they'll never knowingly reduce their bottom line, this rate "hike" will be countered with higher prices somewhere else to make up for it, i.e., inflation.

Most of the guys at my plant are now temps with no insurance coverage and getting paid only $15 per hour. Most cant afford affordable care, and pay the penalty instead

originally posted by: FamCore
a reply to: mikegrouchy

Can someone PLEASE spell out for me what this means to regular Joe Schmoe?

Does it mean companies have to pay more, so we also have to pay more?

I don't quite get it :/

Rates on credit cards and home equity lines will be going up. Some banks might actually start paying interest to savers again.

When money is cheap, people tend to borrow more and thus the theory is that the economy gets stimulated. As the Fed raises rates, money becomes more expensive and thus it tends to slow growth. The .25% won't have much of an effect, but as they keep raising, some growth will get choked off.