June 12 is just three weeks away.
That’s when the Federal Open Market Committee, FOMC, the Fed’s interest rate policy arm, will in all likelihood raise interest rates another 0.25%, the seventh such rate increase since the “liftoff” in interest rates in December 2015.
The market is currently putting the odds of a rate hike at 95%.
This is the most aggressive tempo of rate hikes of any major central bank and puts U.S. policy rates significantly higher than those in the U.K., Japan or eurozone.
The issue for investors is whether the Fed is raising rates too aggressively considering the strength of the U.S. economy. Higher rates imply a stronger dollar, imported deflation and head winds to growth.
If the U.S. economy is on a firm footing, then the rate hikes may be appropriate, even necessary to head off inflation.
But if the U.S. economy is vulnerable, then the Fed’s actions could trigger a recession and stock market sell-off unless the Fed reverses course quickly.
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1 comment:
The Author of this article is obviously unaware that the FED and other Central Bankers (international banking families) are in complete control of the fake economy and will do exactly what they want to do (earn more interest on all loans especially government debts such as Bonds).
The rates will be raised.
The poor people will be impacted negatively.
Everything is going as planned.
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