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BOOM! Fed raises rates

By TwoScoopsOfSpaceForce following x   2018 Jun 13, 12:42pm 1,102 views   17 comments   watch   sfw   quote     share    


Fed raises 2018 outlook for US economy
Economic activity has been rising at a "solid" rate, the Fed's statement said, marking an upgrade from "moderate" in the previous statement.
The median real GDP forecast rose to 2.8 percent, up from 2.7 percent, for this year.
Policymakers also lowered their expectations for the unemployment rate.

https://www.cnbc.com/2018/06/13/fed-raises-2018-outlook-for-us-economy.html

The Federal Reserve hikes its benchmark short-term interest rate a quarter percentage point.
The Fed says in a statement that economic growth has been "rising at a solid rate," an upgrade from "moderate" in May.
The central bank points to two more hikes, which would bring the 2018 total to four increases.

https://www.cnbc.com/2018/06/13/fed-hikes-rate-by-a-quarter-point.html

Nearly 3% growth, said to be impossible.
1   HeadSet   ignore (1)   2018 Jun 13, 1:11pm   ↑ like (3)   ↓ dislike (0)   quote   flag        

Right after the rate hike announcement, DOW drops about 119 points. But it is nice to see 1 year CDs hit 2.25%
2   MrBark   ignore (0)   2018 Jun 13, 1:29pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

TwoScoopsOfDragonEnergy says
Nearly 3% growth, said to be impossible.


December 2017

"PRESIDENT TRUMP: This is going to be one of the great gifts to the middle-income people that they've ever gotten for Chrismas...

Years from now they can make it even more generous if we can get the economy like it should be. The economy now is at 3%. Nobody thought it would be anywhere close. I think it could go to 4, 5, and maybe even 6%, ultimately. Each percentage point is $2.5 trillion. We are back. We are really going to start to rock. We need this as our final push and you're going to see some numbers that are really great. You're going to see great jobs numbers. Jobs are going to come pouring back into this country, which we need very much."

https://www.realclearpolitics.com/video/2017/12/16/trump_were_going_to_see_economy_growth_of_4_5_and_maybe_6_percent.html
3   komputodo   ignore (0)   2018 Jun 13, 8:49pm   ↑ like (3)   ↓ dislike (0)   quote   flag        

HeadSet says
But it is nice to see 1 year CDs hit 2.25%


Yeah, at that high rate it will only take about 30 years to double your money.
4   Strategist   ignore (3)   2018 Jun 13, 9:28pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

TwoScoopsOfDragonEnergy says
Fed raises 2018 outlook for US economy
Economic activity has been rising at a "solid" rate, the Fed's statement said, marking an upgrade from "moderate" in the previous statement.
The median real GDP forecast rose to 2.8 percent, up from 2.7 percent, for this year.
Policymakers also lowered their expectations for the unemployment rate.


Higher interest rates are a side effect of healthy economic growth. Live with it.
6   HEYYOU   ignore (18)   2018 Jun 13, 10:04pm   ↑ like (0)   ↓ dislike (1)   quote   flag        

"A minimum-wage worker can’t afford a 2-bedroom apartment anywhere in the U.S."

"Not even in Arkansas, the state with the cheapest housing in the country. One would need to earn $13.84 an hour — about $29,000 a year — to afford a two-bedroom apartment there. The minimum wage in Arkansas is $8.50 an hour."

How long will people stay complacent?

https://www.msn.com/en-us/news/us/a-minimum-wage-worker-can%e2%80%99t-afford-a-2-bedroom-apartment-anywhere-in-the-us/ar-AAyAJxs
7   ThreeBays   ignore (0)   2018 Jun 13, 10:13pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

HeadSet says
Right after the rate hike announcement, DOW drops about 119 points. But it is nice to see 1 year CDs hit 2.25%


It's not great since inflation rate is at 2.8% and it's going to go higher.
8   Heraclitusstudent   ignore (0)   2018 Jun 14, 9:50am   ↑ like (1)   ↓ dislike (0)   quote   flag        

TwoScoopsOfDragonEnergy says
Nearly 3% growth, said to be impossible.

No, 4% announced by Trump were said to be hard to reach.
3% was reached several times in the past 10 yrs. And it's pretty bad considering the trillion dollar stimulus unleashed by Trump.
9   Heraclitusstudent   ignore (0)   2018 Jun 14, 9:51am   ↑ like (1)   ↓ dislike (0)   quote   flag        

ThreeBays says
It's not great since inflation rate is at 2.8% and it's going to go higher.

3% is real growth obviously. Independent of inflation.
10   Patrick   ignore (0)   2018 Jun 14, 10:11am   ↑ like (0)   ↓ dislike (0)   quote   flag        

komputodo says
HeadSet says
But it is nice to see 1 year CDs hit 2.25%


Yeah, at that high rate it will only take about 30 years to double your money.


True:

1.0225 ^ 30 = 1.95
11   HeadSet   ignore (1)   2018 Jun 14, 10:32am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Patrick says
komputodo says
HeadSet says
But it is nice to see 1 year CDs hit 2.25%


Yeah, at that high rate it will only take about 30 years to double your money.


True:

1.0225 ^ 30 = 1.95
+

What's your point?

A one year CD is what you use when you want a risk free way to park money for that year. Earning 2.25% beats the heck out of the virtual zero returns of the recent past. Longer terms have higher rates, and if you do not mind risk, there are other investments. Extrapolating a 1 year rate risk-free rate over 30 years and bemoaning the return is like calculating a road trip based on the 5 mph speed initially used in the driveway and bemoaning it will take 2 hours to drive 10 miles.
12   TwoScoopsOfSpaceForce   ignore (4)   2018 Jun 14, 10:51am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Heraclitusstudent says
No, 4% announced by Trump were said to be hard to reach.


I'm not takin' Trump, but what others said when the weak Recovery was well underway. I heard this before Trump ever announced.
13   EBGuy   ignore (0)   2018 Jun 14, 3:07pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Anyone looked at NAC lately. Seems to be trading at a discount to NAV but yield is also taking a beating due to interest rate environment (dividend at 5%). It appears to be levered up with inverse floaters. Can't imagine the duck is happy with the direction in rates. Does anyone buy CA munis outright these days? I may end up putting some cash under the mattress with headset.
14   ThreeBays   ignore (0)   2018 Jun 14, 11:44pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Heraclitusstudent says
ThreeBays says
It's not great since inflation rate is at 2.8% and it's going to go higher.

3% is real growth obviously. Independent of inflation.


Yep. I was referring to the CD rate comment.
15   epitaph   ignore (0)   2018 Jun 17, 12:29am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Bad news for housing.
16   Tenpoundbass   ignore (11)   2018 Jun 17, 6:44am   ↑ like (0)   ↓ dislike (0)   quote   flag        

epitaph says
Bad news for housing.


New Towns have to pop up, it's the only logical way forward. We all can't live in a snowglobe above Starbucks all packed in a 3 city block radius.
As much as the small housers love to muse on the thought of us all living in tiny houses, the reality is. Those that preach the loudest live in a 3,000sqft or larger spread in a gated community. They just love the thought of YOU living in a tiny house not them.

We need at least 10 new major cities, 200 new townships and all of the infrastructure that goes to create it.
Building them creates their own microcosms of jobs and financing.
The rate the fake inflation spread under Bush and Obama where we actually had dismal inflation probably the worst in the history of American finances to date. Yet our Fed Chiefs lied their sorry asses off and swore up and down there was no inflation.
We didn't have the wage inflation that agrees with $300K the median price for Real Estate. We'll never have the wages to support the unreported inflation we had the last two decades.

That's why building new towns, and adding more zip codes and roads, will put houses back at the $120K median range. Plus we need to grow lumber in Central Florida and Georgia again. Those trees have all been cleared and never regrown during the RE bubble. They fully expected to sell those lots as a 2 million dollar house. But the bubble crapped out. They never replanted and now in the meantime lumber is 5 times more than it needs to be.

Rates should never fall as low as they did ever again. It was a disaster and destroyed everything. Buying a house should be at least 6% interest.Banks should have to pay their depositors it's just how the world worked before the last generation gave birth to so many fucking Idiots they think they invented and conceptualized everything and everything was up for being improved upon. All they did was shit on millions of years of evolution, traditions and values.

Our higher learning institutions made humanity worse not better. The best lessons were learned in field and on the job making and producing what it takes to live life.
Most recent grads think everything is flawed and they can improve upon it, but they don't' even have the wherewithal to drive a fucking car or move out and live on their own.

Fucking ridiculous. Bring on 12% interest rates, we need to crash houses so bad people demand for new towns just to get away from their failures.
17   LeonDurham   ignore (0)   2018 Jun 17, 9:02am   ↑ like (0)   ↓ dislike (0)   quote   flag        

epitaph says
Bad news for housing.


Historically, rising interest rates hasn't been bad news for housing. Doesn't look like it will be this time either.




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