Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Has The Federal Reserve Missed Its Chance To Increase Interest Rates

Interest-Rates / US Interest Rates Jul 14, 2015 - 01:41 PM GMT

By: AnyOption

Interest-Rates

The finance news space has been bombarded with so many different stories recently that many are starting to forget about one of the biggest stories in the space that we've seen throughout the year; the Federal Reserve. If you remember back to the beginning of the year, there were quite a bit of talks about a Federal Reserve interest rate hike that was to come in June, then it was September, and now, the story seems to have dissipated. Nonetheless, it's still a very important issue to follow; and more importantly, the landscape has changed quite a bit. So today, we'll talk about why Federal Reserve interest rates are so important, how the landscape has changed with regard to the topic, and why I think the Fed may have missed its chance to act. So, let's get right to it...


Why We Can't Forget About The Federal Reserve's Rate

The Federal Reserve's interest rate is currently at a record low of 0.25% and has been for years. The Fed reduced its rate to the record low in the depths of the worldwide economic crisis of 2008 and 2009 as a way to help stimulate economic growth in the United States. With lower interest rates, consumers spend less money to borrow money; leaving more money available for spending and economic growth. This has also largely fueled the bull market the US stocks have been enjoying. With consumers spending more, corporations earn more; ultimately exciting investors and causing growth in the market. However, the low rates weren't designed to last forever; and throughout the year, the Federal Reserve has been talking about when to increase them. This is incredibly important to any investor. When interest rates are increased, easy money leaves the market and investors will be forced to re-balance their portfolios.

However, The Landscape Has Changed Quite A Bit Throughout The Year

The Federal Reserve planned on increasing interest rates when the United States economy was strong enough to stand on its own; and in reality, that time has come, but may have passed. Lately, we've seen big changes in the economic landscape around the world. To name a few...

  • The Greek Debt Crisis – The Greek Debt Crisis has been the major story on finance news outlets for some time now. That's because while Greece is an incredibly strong country, the effects of its default reach far beyond its own country. As a matter of fact, this could lead to economic turmoil in Europe as a whole which is likely to bleed into the United States economy as well.
  • The Chinese Market Collapse – Lately, we've heard quite a bit about the Chinese market collapse and how margin loans in China have widened the effects of the crash. The 30% decline in China is another major issue that swept the world and led to uncertainty in the United States and abroad.
  • The Strong US Dollar – The strong United States dollar has lasted quite a bit longer than experts expected. In the face of economic concern around the world, it's now believed that the strong dollar is going to lead to relatively weak earnings reports this season; which is likely to cause pain for the US economy as well.
  • A Concerning Oil Landscape – Finally, the oil landscape is still very concerning. While oil is already trading incredibly low, it's likely to go even lower thanks to what seems like an inevitable nuclear deal in Iran which will send millions of barrels of oil back onto the market; further hampering growth with another supply glut. Since the United States economy is widely affected by the energy sector, this may be the nail in the coffin that puts a halt to any thoughts of interest rate increases by the Federal Reserve

Final Thoughts

All in all, the Federal Reserve had the ability to increase interest rates earlier in the year. However, today it would be incredibly surprising to see this happen. Unfortunately, the economic tides simply don't bode well. With all of the pressure the United States economy is feeling from major events around the world, I don't think it would be able to handle an interest rate hike as well. Although Yellen did say that the Greek Debt Crisis wouldn't stop an interest rate hike and that the Federal Reserve still plans to increase rates by the end of the year, I would argue that in combination with a strong dollar, weak oil, and economic and market uncertainty around the world, now simply isn't the time to add higher interest rates into the mix.

What Do You Think?

Do you think the Federal Reserve is likely to increase interest rates this year? Why or why not? Let us know in the comments below!

Anyoption™ is the world's leading binary options trading platform. Founded in 2008, anyoption was the first financial trading platform that made it possible for anyone to invest and profit from the global stock market through trading binary options.

Our goal here at Market Oracle is to provide readers with valued insights and opinions on market events and the stories that surround them.

Website anyoption.com

© 2015 Copyright  Anyoption - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules