Why the Fed may be forced to raise rates | Forex Factory

Why the Fed may be forced to raise rates | Forex Factory

Why the Fed may be forced to raise rates

From cnbc.com

Despite the contraction in first-quarter GDP, the Federal Reserve may be forced to raise its benchmark interest rates because of higher core inflation and a low unemployment rate, analyst Peter Boockvar said Monday. "The problem now with the Fed is that, with this 2 percent [annual] growth rate, we may have a 4-handle on the unemployment rate in the second half of the year. Their long-term forecast ... is 5 percent, [and] we have core inflation ticking up. So, the Fed's going to be put into a situation in which, with 2 percent growth, they're going to have to start raising rates," the Lindsey Group's chief market ... (full story)

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Jun 1, 2015 9:06pm

"...low unemployment rate...."?

Well, there is one lying statistic. And the FED knows it! Can't manipulate the FED into raising interest rates on the lie that unemployment is low!

And even if unemployment were not low, the quality of jobs that are being made available truly sucks. You have to stretch the truth even to call many part time jobs, because they are more like spare time jobs. Full time jobs with benefits are being replaced with part time and spare time jobs. It is counterfeit reporting to therefore say that unemployment - in and of itself - is any factor at all regarding any change of interest rates.

The FED knows all this. They know the lies in the statistics. And there is no way the idiots throwing out deceptive statistics are going to be successful in forcing the FED to do anything.

Jun 1, 2015 9:59am

Quoting iumoren

Disliked

There is no need to tickle trader's nerves with news about possible US Fed Reserve rate hike.

Am sure Fed Chair Yellen knows quite well that only "gradual rate increase" is useful for the US economy, and not a "shock therapy".

Don't expect rate increased overnight from <0.25% to 5%!!! (for example). The market will explode if such happens!

Ignored

I think 0.1% now and then see what happens ( = wait until next year).

The last time they lifted off zero, even though gradual, the rate marched up to around 5% .... and then the sub-prime crash .... the effects of which we still endure.

Jun 1, 2015 9:06am

Quoting Bankerssuck

Disliked

Well the US banks use the Zirp to borrow at low rates then long the US treasury to keep the yields low.

If Rates were to increase then they will no longer be able to suppress yield on the 10 year. Which will cause a spike since there is no demand for US treasury. Federal reserve is the only player in the market, aside Japan who is a puppet nation and have a gun to their head.

If the FED dare to increase rates then its game over for the treasury market, stock market etc. I think they will drag Americans into a war and pretend all of this happened...

Ignored

Agree, but, if they don't raise rates soon reserve currency status is up for grabs... doomed if they do, doomed if they don't

Jun 1, 2015 8:43am

Quoting Bankerssuck

Disliked

If the FED dare to increase rates then its game over for the treasury market, stock market etc. I think they will drag Americans into a war and pretend all of this happened because of the war.

Ignored

Same feelings here, alas. For this kind of monetary abyss, the war should be quite large. Middle East is too irrelevant, that's why US are poking Russia in the eye in Ukraine and China in South China Sea for good measure.

No world great power ceded it's throne without a major war and USA is no exeption here, I'm afraid. Though I sincerely hope it is.

Jun 1, 2015 11:56am

Conclusion, CNBC article hypothesizing Fed raising rates indicates Fed not raising rates.

Just another one in a thousand exercises in mental masturbation we've seen over the past six or seven years.

Jun 1, 2015 8:13am

Honestly i have many doubt on any interest rate hike by USa, because if you listen everyday what they say they search any motive to delay the hike, any stupid motive is good, weather instability from external. So i think that in june no hike, in sptember no hike, in dicember no hike, maybe in "octember" so never!

Jun 1, 2015 8:21am

Quoting Bankerssuck

Disliked

Well the US banks use the Zirp to borrow at low rates then long the US treasury to keep the yields low.

If Rates were to increase then they will no longer be able to suppress yield on the 10 year. Which will cause a spike since there is no demand for US treasury. Federal reserve is the only player in the market, aside Japan who is a puppet nation and have a gun to their head.

If the FED dare to increase rates then its game over for the treasury market, stock market etc. I think they will drag Americans into a war and pretend all of this happened...

Ignored

Very very interesting theory, not bad not bad friend! I like it

Jun 1, 2015 8:34am

Quoting Bankerssuck

Disliked

Unless the US can become a manufacturing nation again, there is no way they can cover their deficits. Hence they need the QE, sure QE might have ended officially however they are still carrying out back door QE by the banks and by other puppet nations like Japan.

Once the world wakes up to this reality the USD is going to melt, maybe not against other fiat trash like Euro, GBP or JPY since all of them are garbage too. However against real money like Gold and Silver all fiat currencies will take a nose dive. History just has a way of repeating...

Ignored

Yes agree this is one or maybe the only reason that "they" want to substitute the money paper into eletronic money with card, no more cash. The reality i think the fed has lost the control and they don't know or not want to stabilize the normality. So they boss are the big bankster.

Jun 2, 2015 1:11am

Quoting Gwan

Disliked

how about a 0.01% rate increase?

Ignored

That would do it! The first sign that US$ rates really are going to move up would power currency pairs in favour of the $.

Jun 1, 2015 8:08am

Never happen

, But I wish it would

Jun 1, 2015 9:57pm

how about a 0.01% rate increase?

Jun 1, 2015 8:17am

Well the US banks use the Zirp to borrow at low rates then long the US treasury to keep the yields low.

If Rates were to increase then they will no longer be able to suppress yield on the 10 year. Which will cause a spike since there is no demand for US treasury. Federal reserve is the only player in the market, aside Japan who is a puppet nation and have a gun to their head.

If the FED dare to increase rates then its game over for the treasury market, stock market etc. I think they will drag Americans into a war and pretend all of this happened because of the war.

Jun 1, 2015 8:30am

Quoting cecchino

Disliked

Very very interesting theory, not bad not bad friend! I like it

Ignored

Unless the US can become a manufacturing nation again, there is no way they can cover their deficits. Hence they need the QE, sure QE might have ended officially however they are still carrying out back door QE by the banks and by other puppet nations like Japan.

Once the world wakes up to this reality the USD is going to melt, maybe not against other fiat trash like Euro, GBP or JPY since all of them are garbage too. However against real money like Gold and Silver all fiat currencies will take a nose dive. History just has a way of repeating itself.

Jun 1, 2015 8:45am

There is no need to tickle trader's nerves with news about possible US Fed Reserve rate hike.

Am sure Fed Chair Yellen knows quite well that only "gradual rate increase" is useful for the US economy, and not a "shock therapy".

Don't expect rate increased overnight from <0.25% to 5%!!! (for example). The market will explode if such happens!

Jun 1, 2015 8:50am

Every one is on a fishing expedition, just my view

Jun 1, 2015 9:11am

Quoting Guest

Disliked

interesting - it could mean USD up and fast

Ignored

Yeah right

Trader#03F4

Jun 1, 2015 8:04am

interesting - it could mean USD up and fast

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Jun 1, 2015 8:02am
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