The rate hikes are coming! The rate hikes are coming! Eventually. Days after the Federal Reserve seemed to sound the alarm that the era of near-zero interest rates is ending, Chairman Ben Bernanke tempered those expectations a bit this week.
A rate hike is coming. It is coming because the economy is not in crisis and zero rates are crisis rates, Bloomberg’s Richard Breslow writes. It is coming because the benefits of starting down the path to monetary policy normality are vitally important to the future health of the economy and restoring the Fed’s reaction function.
Labor market conditions have improved significantly in the past month or so. Combine this with the dramatic improvement in households' finances this year, and one is forced to ask: why is there still so much pessimism in regards to the economy?
The ECB did the unexpected today, cutting the interest rate to .25% from .50%.
Here is the ECB press release.
7 November 2013 - Monetary policy decisions
At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:
Submitted by Adam Taggart via PeakProsperity.com, Economist Steen Jakobsen, Chief Investment Officer of Saxo Bank, believes 2015 will be another "lost year" for the economy. And he predicts the Federal Reserve will indeed start to raise rates later this year, surprising the market and taking the wind of out asset prices.
As reported earlier, the biggest stunner bar none in today's FOMC announcement, was the emergence of a negative interest rate dot in the Fed's projections. It was unclear who drew that (perhaps Kocherlakota, perhaps not)...