Surprising revelation: Janet Yellen reveals why the Fed is raising rates!

Summary: Usually we can only guess at the motives of our senior officials. But on rare occasions they give us clues to their real priorities and objectives. The Fed is especially opaque, so we speculate about their odd rate increases during a slow and slowing economy. Yesterday Janet Yellen explained why. The answer is shocking … Continue reading Surprising revelation: Janet Yellen reveals why the Fed is raising rates!

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Trump forced the Fed to raise rates. The results could be ugly.

Summary: Trump's unexpected election forced changes in the forecasts and plans of the Fed's leaders. Today's decision to raise rates is their first result. Janet Yellen was quite candid about this. The implications of the rate rise are complex. The effects might prove calamitous. Janet Yellen's remarks at the press conference She clearly pointed to Trump's … Continue reading Trump forced the Fed to raise rates. The results could be ugly.

Today’s mythbusting: the Fed is not suppressing interest rates

Summary: Here's another in my series of economic myth-busting articles, explaining that the Fed is not suppressing rates. It is a follow-up to Ignore The Bond Bears, The Fed Will Not Raise Rates. Part of the magical, even divine, powers attributed to the Federal Reserve is their ability to set interest rates -- both short- … Continue reading Today’s mythbusting: the Fed is not suppressing interest rates

Move evidence the Fed will not raise rates on our slow-mo economy

Summary: On Thursday I posted "Ignore The Bond Bears, The Fed Will Not Raise Rates". Many on Wall Street disagree -- most of whom since 2012 have expected a cycle of rising rates to begin really soon.  Such as J. P. Morgan's prediction of a rate increase in December. Friday's data confirms my forecast in … Continue reading Move evidence the Fed will not raise rates on our slow-mo economy

The Fed Will Not Raise Rates In The Foreseeable Future

Summary: Since 2010 I have said that the economy is locked in slow-mo and the Fed will not start a new rate cycle. It's even more true today than in 2010. Many investors and economists are convinced that the Fed will soon end its near-zero interest rate policy and begin raising rates - "normalizing them". … Continue reading The Fed Will Not Raise Rates In The Foreseeable Future

The Government Has A Clip Full Of Ammo To Fight The Next Recession

Summary: It's time to prepare for a possible recession in 2016. The manufacturing slump continues to deepen. A toxic combo: high inventories in November and weak retail sales in December. In February this expansion will tie for the 3rd longest expansion. {2nd of 2 posts today.} The Atlanta Fed's GDPnow model just lowered its est … Continue reading The Government Has A Clip Full Of Ammo To Fight The Next Recession

Why did the Fed raise rates? For the opposite of the reason they gave…

Summary: The Fed Governors told us they planned to raise rates, and months ago told us when they would do so. But their explanation of why they raised rates makes little sense. We can see their thinking by looking at the economic projections released at the Open Market Committee meetings. They raised rates not because … Continue reading Why did the Fed raise rates? For the opposite of the reason they gave…