Fed Interest Rate Speculation & News

[Fivetears]

Election could delay Fed rate rise until December
The Federal Reserve may be hesitant to raise interest rates ahead of the U.S. election in November, although there is no hard evidence to support the widely held view that politics influences monetary policy. The Fed has raised rates in election years, as well as leaving them on hold or cutting. As a result, there is no pattern to confirm the strong sense that the central bank prefers to hold fire as Americans go to the polls. Nonetheless, economists say the case for rate increases would have to be particularly convincing for the Fed to act.
http://news.yahoo.com/s/nm/20080629/bs_nm/usa_fed_politics_dc_1;_ylt=Aotye0TfsQX7GpwMrD7Ec3ME1vAI

 

[luv2read]

Election could delay Fed rate rise until December
The Federal Reserve may be hesitant to raise interest rates ahead of the U.S. election in November, although there is no hard evidence to support the widely held view that politics influences monetary policy. The Fed has raised rates in election years, as well as leaving them on hold or cutting. As a result, there is no pattern to confirm the strong sense that the central bank prefers to hold fire as Americans go to the polls. Nonetheless, economists say the case for rate increases would have to be particularly convincing for the Fed to act.
http://news.yahoo.com/s/nm/20080629/bs_nm/usa_fed_politics_dc_1;_ylt=Aotye0TfsQX7GpwMrD7Ec3ME1vAI

ROFLMFAO!:laugh::nuts:

 

[Fivetears]

Inflation in Europe Stirs Debate Over Rates
Inflation in the euro area surged to a record high for the 12 months ending in June, fueling a debate about whether the European Central Bank should raise interest rates more than once to keep higher costs from harming the European economy. The inflation rate, 4 percent, fed by oil prices that rose above $143 a barrel Monday, is double the level deemed acceptable by the European Central Bank, which tries to keep inflation below, but close to 2 percent. The European bank is widely expected to raise its benchmark interest rate by a quarter of a percentage point, to 4.25 percent, when it meets Thursday. It hinted at the move last month, surprising observers who said that they expected it to stand pat for much of the year. The bank president, Jean-Claude Trichet, reiterated Monday that securing price stability in the medium term was ‘essential.’ Yet financial markets are now awash in discussion about whether more rate increases will be needed, a debate that is sharpened by continued weakness of the dollar against the euro. After the release of the inflation report, investors bid up the odds that the central bank would raise rates again after July. This market-driven wager is controversial among some economists, many of whom say they believe that slowing growth in Europe will take the edge off inflation as declining demand limits the room for price increases. In an unusually stark warning, the Bank for International Settlements, an organization of central banks, on Monday played down the risks to growth that tighter monetary policy would bring and emphasized concerns that rising prices are allowing an inflationary psychology to take root.
http://www.nytimes.com/2008/07/01/business/worldbusiness/01inflate.html?ref=worldbusiness

 

[luv2read]

Inflation in Europe Stirs Debate Over Rates
After the release of the inflation report, investors bid up the odds that the central bank would raise rates again after July. This market-driven wager is controversial among some economists, many of whom say they believe that slowing growth in Europe will take the edge off inflation as declining demand limits the room for price increases. In an unusually stark warning, the Bank for International Settlements, an organization of central banks, on Monday played down the risks to growth that tighter monetary policy would bring and emphasized concerns that rising prices are allowing an inflationary psychology to take root.
http://www.nytimes.com/2008/07/01/business/worldbusiness/01inflate.html?ref=worldbusiness

The economists are full of it, they are saying the same BS that BA, the financials and the fed gave us for a year; until they were caught between the rock and the hard place - raise rates to control inflation or lower them to try to stave off a recession. BIS has it right, raise rates and let the economy take care of itself, not the other way. Inflation destroys economies. I'm amazed that those guys in europe kept their eyes closed to what's happened here....or did they? Any chance they're oil specs??:laugh::nuts:

 

[nnuut]

OK Gentle Ben, do something your BEAR FRIENDS are killing us! View attachment 4174

Europe may push the Fed to raise rates

The European Central Bank is expected to boost a key rate Thursday in order to fight inflation. The move may cause a weaker dollar and force the Fed's hand.

By Paul R. La Monica, CNNMoney.com editor at large

Last Updated: July 1, 2008: 10:22 AM EDT
About the author

NEW YORK (CNNMoney.com) -- The fireworks may come a day early for the financial markets if the European Central Bank, as expected, raises interest rates on Thursday.
If the ECB, Europe's counterpart to the Federal Reserve, hikes rates, that could put even further pressure on the anemic dollar and send commodity prices even higher.
The ECB will announce its decision on interest rates early the morning of July 3 and will hold a press conference shortly thereafter to discuss the decision.
Talkback: Should the Fed be more concerned about the weak dollar? [more]
http://money.cnn.com/2008/07/01/markets/thebuzz/index.htm?postversion=2008070110

 

[Silverbird]

It may be that the European opposition to raising interest rates has to do with the rising Euro. If the European interest rates are higher than the U.S. *and* the U.S. $ is dropping in value, European goods are going to rise in price. Of course this means that the price of imports of materials and petroleum products would go down, but they do have some oil in the North Sea which is priced in English Pounds - which is not the same as the Euro but often follows the Euro's trends.

 

[Fivetears]

Fed must prevent wage-price spiral: Lockhart
The Federal Reserve must "react decisively" to stop inflation pushing up wages, Federal Reserve Bank of Atlanta President Dennis Lockhart said, dropping a clear hint about the possibility of interest-rate hikes ahead. Lockhart's remarks will likely reinforce the sense among investors that the next move in rates will be up as the Fed acts to keep inflation at bay. However, he leavened his warning on price pressures with comments about the still fragile state of financial markets, and the gradual nature of the economic recovery, that did not signal an imminent desire on his part for policy action.
http://news.yahoo.com/s/nm/20080701/bs_nm/usa_fed_lockhart_dc_2;_ylt=AvoXQ5EWNvwmJAAr0Vd4Ak0E1vAI