Financial experts are divided on whether or not they believe the Federal Reserve is going to come out next week and finally raise their interest rates for the first time in nearly a decade. They've had there interest rates at zero for many years now and any time they even mentions the topic of raising rates, we see a negative reaction in the market. But sooner or later you would assume that they have to come out and raise rates, otherwise we will see that they continue to adopt printing schemes like Q4 and more. They want us to believe that their printing adventures have benefited the market, but those who understand sound monetary policy know that it has done anything but that.
“As long as the Fed is able to bluff, then everyone can pretend what the Fed did worked.” says finance analyst Peter Schiff. But sooner or later it will be exposed to the majority that their quantitative easing didn't fix anything. A final rate hike in interest rates would signal the end of an easy-money era. The Federal Reserve plans to meet this coming Wednesday and Thursday, and many are eagerly awaiting to find out what the outcome is going to be.
“How can people think that interest rates can stay this low for this long, and there not be lots of problems as a result?” asks Schiff. Mistakes are made when interest rates are artificially low, and we have seen that low interest rates promote negative long-term results in the market. “Those mistakes are corrected when interest rates go up,” says Schiff. The Bank of International Settlements has even themselves admitted that low interest rates are to blame for excessive debt.
The longer we continue with the current monetary “cheap money” charade, the worse it is going to be when it finally comes time to address and fix the problem. Of at least 19 economists and investment strategists who were surveyed by Action Economics this week, it was found that roughly 58% believe the Fed will delay the move to raise rates after recent turmoil seen in the markets over the last couple of weeks. According to Deutsche Bank's chief economist, Joe LaVorgna, they are predicting that the Fed will call for a rate hike in October of this year. Other prominent financial institutions on Wall Street, like Goldman Sachs, are also predicting that we could see a hike later this year; perhaps sometime in December.
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