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  • Fed's Lacker says four rate hikes in 2016 would be "gradual"

    From reuters.com

    Federal Reserve forecasts pointing to four interest rate hikes in 2016 show what the U.S. central bank means when it says it anticipates raising rates at a "gradual pace," Richmond Fed President Jeffrey Lacker said on Friday. "That's half the rate at which we raised rates in the last tightening cycle. So that's what 'gradual' means to me," Lacker told reporters in Charlotte, North Carolina after participating in a business panel discussion. The Fed raised the range of its benchmark interest rate by a quarter of a percentage point on Wednesday and indicated that further hikes would be gradual. The central bank also ... (full story)

I'd say four cuts rather than four hikes.
why is that?
USD bullish
if that true..........FED interest rate will be 1.5% or 2.0% end of 2016...... so true US now divergence in big economic growth
Follow price direction
Quoting hesron
if that true..........FED interest rate will be 1.5% or 2.0% end of 2016...... so true US now divergence in big economic growth
well you need to go and read and read again economic growth figs lol
people leave, but this thread will go on for ever
Quoting Aussi
well you need to go and read and read again economic growth figs lol
fine, We will see in 2016 what will happen....but it is true now interest rate rose hike
Follow price direction
Quoting hesron
fine, We will see in 2016 what will happen....but it is true now interest rate rose hike
I am agree with Hesron.
This only reflects what Yellen has been saying for more than a year .... "the timing of liftoff matters less than the pace of subsequent increases, which will be gradual ..."

FOMC meets 8 times a year, so this story anticipates 50% of its 2016 meetings to involve a rate hike ..... Lacker is one of the most hawkish FOMC members, so I would expect his estimate of four hikes to be at the upper end of the scale.

If I was a betting man, and the most hawkish fed member suggested four rate hikes in 2016, I would bet on two or three.
si hoc legere scis nimium eruditionis habes
Quoting nadeem1971
I am agree with Hesron.
I have seen big mouths deadheads give forecasts and I see no reason why the feds will keep interest rates rising
people leave, but this thread will go on for ever
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Quoting Aussi
I have seen big mouths deadheads give forecasts and I see no reason why the feds will keep interest rates rising
I was in the same boat, until I watched yellen's conference. One of the answers she gave actually makes sense. She said that the fed wanted to raise, because the risk of inflation suddenly coming on fast, thereby forcing fed having to raise a significant amout with little warning to the market, (causing market crash) is less than the chance small gradual raises tank the market....when we are coming from zero..........is it true, the fed thinks so! They are is a tight spot here, rock and a hard place, use caution. If the market handles the hike, they will try again for sure
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I suppose once everyone gets beating the drum of deflation forever, inflation going to come on like a freight train, leaving everyone wondering how they couldn't see it. Not looking likely atm, but things can change on a dime!
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