The
Federal Reserve has made a statement that interest rates will raise after the Stimulus
program ends in October, which should mean that short term rates should rise, this
is not the case. Janet Yellen has said there is no set calendar date for rate raise.
The Short term interest rates have been at 0% since 2008. This statement has led
to two members of the making committee to walk out. Many investors are watching and waiting for
when the Fed will increase the interstate rate
The
Fed has repeated itself in a new mess. With its always consistent and mind- boggling
statement, “When economic conditions and
the economic outlook warrant a less accommodating monetary policy, the
Committee will raise its target range for the federal funds rate," The
fed have repeat this statement multiply times. A member of the board walkout t
of the stated that if the Fed continues on this path it runs the risk of faster
rises in prices. This has led investors to simply scratch their heads and
wonder.
Basically
what is happening in this article is that the Federal Reserve has promise to
raise its short-term loan rates, but only of the data shows that the economy
haves improved. One of the factors that determine this is inflation. Inflation
Last month (August 2014) is currently at 1.7% annually. This is below what the
Fed’s target rate.
The Fed cannot do much right, correct? Short-term loan rates should be going up in just a week or two, but they might not go up at all this year or the next year.
ReplyDeleteFor some reason I find it interesting that the Federal Reserve has a standard for the nation's inflation level. I wonder how valid this standard is. Inflation can be bad, but deflation can be just as bad at times as well.
ReplyDeleteI agree with Connor. The inflation rate in the country right now is tolerable. The federal reserve should be okay with this rate. Whatever happens, just do not let deflation occur.
ReplyDeleteI kind of agree with Connor and Joel inflation is a problem but deflation will be really bad. The fed just need to get there act together.
ReplyDeleteI also agree with Connor inflation is bad but deflation can be worse
ReplyDelete