Mortgage Professional America forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Why the fed should raise its rate in September

Notify me of new replies via email
Mortgage Professional America | 27 Aug 2015, 06:30 AM Agree 0
A former big bank chairman is laying out his argument in favor of a Federal Reserve interest rate hike in September
  • Brad | | 27 Aug 2015, 10:43 AM Agree 0
    Dick makes some really solid points here. The most important of which states that the metrics of measuring inflation are error-ed. The only thing we know is that to take a vacation, hire a plumber, rent an apartment or eat a cheeseburger costs twice as much as is it did four years ago. Just because we measure our inflation off consumer goods from a country that keeps artificially devaluing its currency, does not mean we are not experiencing inflation in this country. And how about the Fed should keep on schedule to raise interest rates firstly because they said the would and secondly because American Fiscal Policy should not be so easily swayed by foreign markets. The amount of government intervention in our economy is staggering and sickening. The people that founded our financial system did not want this and cautioned of it.
  • Tony | | 27 Aug 2015, 12:56 PM Agree 0
    To read these types of statements become very confusing to those that may have a limited knowledge of the influential financing statements that are generated by the government. It is sometimes impossible to believe statements that are put out by Washington D.C. If those people in positions of authority would realize that they were elected to represent those of us that are not policy making authorities. We need those in Washington to erase the "D' & "R" from their titles and realize that the vast majority of citizens want good decisions and for them to talk with one another and think about those that put them in a position to make decisions on their behalf. If there are continual decisions made that cause confusion and fear then the fear becomes the result. Fear drives bad decisions and bad decisions cause most people to look for someone to blame rather than solve problems!!
  • Dave | | 27 Aug 2015, 01:24 PM Agree 0
    I can see why Mr. Kavacevich's opinion is in the minority. The market is not looking for the to Fed increase. To the contrary, the market rallies every time weak economic news/data comes out supporting the fact that the Fed will not raise rates. For the market to rally on weak economic data means the market "party" will only continue so long as the Fed does not raise rates. All of this is totally contrary to why a market should rally, i.e. because the economy is strong, wages and employment are growing and future inflation is a valid concern. The prevailing news nowadays is the future prospect of deflation. Our treasury rates are already multiple times higher than any other major foreign economy. The American consumer will not purchase unless interest rates are low or zero. Just look at car or furniture advertisements. To support current prices they have to offer zero interest financing for even longer extended terms. Does that sound like a consumer eager to borrow money? Why the Fed would raise rates with this view in mind makes no sense. The only reason the Fed would raise rates would be to further the illusion that they have the ability control the pace of economic activity. It is already apparent that they don't since, after years or low rates we still have a stronger prospect of deflation versus inflation.
Post a reply