Fed's Rate Hikes Are Really A Bullish Validation Of Trumponomics

Discussion in 'Economics & Trade' started by expatpanama, Mar 16, 2017.

  1. expatpanama

    expatpanama Active Member

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    from: http://www.investors.com/politics/e...-really-a-bullish-validation-of-trumponomics/

    Editorial 3/15/2017

    ...the Fed's decision to raise rates is a nothing-burger. It takes the benchmark fed funds rate only to the 0.75%-1.00% range, a level that is almost negligible compared to the past norm for interest rates. By way of comparison, from 1992 to 2017, a period of abnormally low interest rates, the fed funds averaged 2.74%.

    And that may be the point.

    Investors know that, with a change in the presidency, the economic future is likely to be much better than the recent slow-growth past, and they're putting their bets on the table now.

    The Fed's measured, quarter-point hike is a signal that policymakers might have learned their lesson, and won't make the same foolish mistakes that they did in the recent past. That's why most market indexes on Wednesday closed near their highs for the day...


    ...the deregulated, low-tax Trump economy will grow, and grow fast. There are going to be more jobs. They fear that strains will emerge on labor and raw resources, pushing inflation above their 2% long-term target. And they're afraid of getting way behind the curve.

    In short, the Obama era of slow growth is finally ending. Investors know that's not a bad thing. As long as the Fed doesn't push the growth-equals-inflation panic button and ratchet up interest rates, as it has in the past, the Trump economy's future should be very bright indeed.

    * * * * * * * * * * * * * * * * * * * * * * * * * * * * ​

    Stocks are soaring and the reason is that Yellen's made it clear that the Fed's not raising rates any more. OK, so they're not raising 'em any less either but that's not the point.

    Yeah, we all agree that Yellen's got a lot of short comings. She's a typical extreme left-wing loopy Princeton Democrat w/ politics to match. She's unable to lead and for years she's utterly failed to get a concenessus of policy opinion at the Federal Reserve. imho the only thing she's good for is monetary policy which I'll concede she does perfectly: we've had stable price growth well under control. Come to think of it, that's really what her job is all about.

    So while her politics are dumb, she's got a super good understanding of what the Fed must do. Her control of interest rates (about the only thing the Fed can do) kept them as low as possible to prevent a replay of the serious deflation that hit at the end of '08. When things calmed down (it took years and years until 2015) she tried raising rates and she immoderately saw that the O economy was still on life support and the rate hikes stopped.

    Until now. She won't say it, but she knows that since the election we now got a great economy.
     
  2. DennisTate

    DennisTate Well-Known Member Past Donor

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    I agree.....
    Wall Street will certainly tend to like the policies put forward by President Trump and his team.
     
  3. expatpanama

    expatpanama Active Member

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    huh, a lot happened in a week as stocks have dropped a few %. Aw, we're still ok, the major indexes are still up say fifteen or twenty percent since the election, even though Krugman had insisted that we'd have a crash. ;)
     
  4. AlNewman

    AlNewman Well-Known Member

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    But the best is yet to come and this is not meant the way you are thinking!!!
     
  5. AlNewman

    AlNewman Well-Known Member

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    Krugman is an idiot but he may have accidentally got something right, out of spite not fact.
     
  6. OldManOnFire

    OldManOnFire Well-Known Member

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    When the interest rate hikes are minuscule and gradual I'd say it signals more of a guarded optimism.

    I am unaware of anything done by Trump that in just a few weeks time has increased GDP?
     
  7. GrumpyCatFace

    GrumpyCatFace Active Member

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    The rate hikes began well before the election, and have been happening at the same pace throughout. It's completely unrelated to Trump.

    Wall Street however, has decided that he's going to cut all taxes enough that companies will be more profitable (even though they barely pay any now), and has goosed itself into an absolutely amazing bubble.

    Look at what the market did this week, as it became apparent that he wouldn't get RyanCare passed. Then the absurd spike when he pulled the bill and promised to move on to "tax reform" late Friday.

    The entire system is riding on magic fairy dust right now, and long overdue for a correction. We probably won't see another rate hike for years, after it happens.
     
  8. OldManOnFire

    OldManOnFire Well-Known Member

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    Buy the rumor...sell the news!
     
  9. VietVet

    VietVet Well-Known Member

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    This is what is known as a "puff piece".
    The economy does not turn on a dime.
    Attributing the healthy economy to Trump is laughable.
    It took Bimbo Bush YEARS to destroy the economy, and YEARS for Obama to keep it from collapsing and bring it back to health.
    A year or more from now - if the so--called president hasn't been impeached - THEN we can see what his "plans" have wrought.

    I think even Trump Chumps aren't THAT easy, but who knows? They can swallow a lot of malarky.
     
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  10. DennisTate

    DennisTate Well-Known Member Past Donor

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    The psychological boom that is happening in Israel at this time can
    positively impact the USA and world economy.

    Google the name Rabbi Judah Ben Samuel for some background information on this......


    Rabbi Advises: Invest in Israeli Real Estate, Prices Will Soar When Messiah Comes “Very Soon”
    Read more at https://www.breakingisraelnews.com/...es-buy-now-advises-rabbi/#gGd2OquBQZEApawe.99
     
  11. GrumpyCatFace

    GrumpyCatFace Active Member

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    LMFAO Religious real estate investment... now I've seen it all.
     
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  12. Montegriffo

    Montegriffo Well-Known Member

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    He's not the Messiah he's just a very naughty boy.........
     
  13. The Mandela Effect

    The Mandela Effect Well-Known Member

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    It's going to get quite ugly once this bobble pops. With bank customers now being unsecured creditors due the G20 ruling and stuff like CDO's still going it's likely going to hurt worse than 2008 did.

    Bush screwed us before, then Obama let the G20 screw us on customer banking protection and now who knows what Trump is going to do. I am not even sure if the crash can be stopped at this point as factor's have been building for a while now that point to a underlying weakness in the world marketplace.
     
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  14. Deckel

    Deckel Well-Known Member Past Donor

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    Wait and see what happens if his tax cuts do not go through which they very well may not due to the deficit hawks
     
  15. AGWisFAKEsillyBABYKILLERS

    AGWisFAKEsillyBABYKILLERS Well-Known Member

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    Lowering rates means that they are trying to keep the economy from crashing.. It can also make bubbles..
    Raising rates means that their is more confidence in the economy, confidence that the economy can handle higher interest on loans, the news of raising can hurt the market in the short term..

    This pretty much means they believe in Trump and are adjusting the rates accordingly..
     
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  16. GrumpyCatFace

    GrumpyCatFace Active Member

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    How about the news that they're planning to unload $3 Trillion in assets this year? Reverse QE should be fun to watch...
     
  17. expatpanama

    expatpanama Active Member

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    The Fed's been sitting on $4.3T in treasuries & mortgage stuff, so dumpling $3T would be a good start. Sure, it'll be rough on T trying to get the econ back up but hey, he was the one crying about the Fed's low interest rates during the campaign. Rate hikes now shud should make him say 'thank you' right?
     
  18. DennisTate

    DennisTate Well-Known Member Past Donor

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    Exactly!!!!!!!
     
  19. DennisTate

    DennisTate Well-Known Member Past Donor

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    President Donald Trump knows the Real Estate Market extremely well..... and he knows how to cause Real Estate within one hundred miles of all major USA cities to SKYROCKET in value over the coming eight years.

    http://www.politicalforum.com/index...-fed-policy-pay-off-usa-national-debt.489825/

    Could a real estate boom plus better Fed policy pay off USA national debt?
     
  20. AGWisFAKEsillyBABYKILLERS

    AGWisFAKEsillyBABYKILLERS Well-Known Member

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    If they print a ton of money to pay off the debt it would case inflation and many in the know would rush to things like real estate, gold/silver/bitcoin to hedge against the falling USD..

    What I would like to see is them print a ton of money to build infrastructure and military first to get it nice and inflated BEFORE they print more to pay of china and the rest of the national debt..

    Build our country good then really stiff china..
     
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  21. DennisTate

    DennisTate Well-Known Member Past Donor

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    Wow!!!!

    I actually have been thinking that the F-35 is all set up to play a major role in bringing
    peace to the Middle EAst.......
    and frankly to the whole planet.

    AGW.... notice the little up arrow to the right of my name in a quotation?

    Just click on it and you will go directly back to the original statement wherever it was at......

    In this case the specific link is:

    http://www.politicalforum.com/index...r-our-air-force.401457/page-2#post-1067136413

    Could P. M. Stephen Harper be correct abt the F-35 being the best for our air force?
    ................
    Oh.... AGW... you will want to take a peek at the opening post in this discussion.... guess who I quote there?
     
    Last edited: Apr 6, 2017

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