Federal Reserve Might Announce Interest Rate Rise


Since the worldwide recession started around 2009, the Federal Reserve has kept interest rates at near zero.  The Federal Funds Rate has not gone up since 2006.  Could we see interest rates go up following the next Fed press conference?  How could a rise in interest rates affect the global currency reset?  Please learn about the history of the Federal Reserve first before proceeding.

us fed funds rate 2001-2015

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Last Updated On: December 15, 2015
By: Nick Giammarino
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Peter Schiff, an American financial analyst, stockbroker, author, and one-time Senate candidate, believes now the Fed may actually raise interest rates.  Learn about how the Fed’s next move may cause a reset of the gold and silver markets by listening to the video below.

Listen to Peter Schiff analyze the Fed and what their next move may be:

A rate hike is expected according to many analysts, not just Mr. Schiff. The commercial real estate market is in a new bubble, and it’s only a matter of time before that comes crashing down as well. Some, including myself, thought we might see negative interest rates like we have seen in Europe.

Now compare what he says to a recent speech by Federal Reserve head Janet Yellen. Try to watch or simply listen to this press conference, pay attention carefully to her choice of words.  Listen for the words confidence, labor participation and other important terms.  If you are not familiar with any terms she uses, pause the video and look them up.  We have been on this fiat currency system for so long that a return to a sound money system is more important than just a rise in interest rates.

Bond markets are apparently going down in anticipation of the December 15-16 meeting.
http://www.cnbc.com/2015/12/14/us-bonds-decline-with-all-eyes-on-central-bank.html

Even though the Federal Reserve made the decision to stop quantitative easing (QE) back in January, they have been reluctant to raise interest rates in over a decade.

Chair Janet L. Yellen
At the Economic Club of Washington, Washington, D.C.
December 2, 2015

In the Dec 3 2015 video below, Federal Reserve Chair Janet Yellen talks about labor gains boosting her confidence in a return to two percent inflation in testimony before Congress’s Joint Economic Committee. She speaks on “Bloomberg Markets.”

Monetary Policy

Let me now turn to the implications of the economic outlook for monetary policy. Reflecting progress toward the Committee’s objectives, many FOMC participants indicated in September that they anticipated, in light of their economic forecasts at the time, that it would be appropriate to raise the target range for the federal funds rate by the end of this year. Some participants projected that it would be appropriate to wait until later to raise the target funds rate range, but all agreed that the timing of a rate increase would depend on what the incoming data tells us about the economic outlook and the associated risks to that outlook.

In the policy statement issued after its October meeting, the FOMC reaffirmed its judgment that it would be appropriate to increase the target range for the federal funds rate when we had seen some further improvement in the labor market and were reasonably confident that inflation would move back to the Committee’s 2 percent objective over the medium term. That initial rate increase would reflect the Committee’s judgment, based on a range of indicators, that the economy would continue to grow at a pace sufficient to generate further labor market improvement and a return of inflation to 2 percent, even after the reduction in policy accommodation. As I have already noted, I currently judge that U.S. economic growth is likely to be sufficient over the next year or two to result in further improvement in the labor market. Ongoing gains in the labor market, coupled with my judgment that longer-term inflation expectations remain reasonably well anchored, serve to bolster my confidence in a return of inflation to 2 percent as the disinflationary effects of declines in energy and import prices wane.

Minutes of the Federal Open Market Committee

October 27-28, 2015

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress–both realized and expected–toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.

Fed may raise rates based on the jobs numbers.
Labor participation rate 62.5% lowest since middle of the 1970s. Biggest surge in involuntary part time workers. This was the biggest jump in more than three years.  Think about that, it means the number of people who at working part time, but who desire full time, has increased dramatically in just the last few months.

Check out this guide to the coming financial collapse

Minutes of the Federal Open Market Committee

September 16-17, 2015

The Committee agreed to maintain the target range for the federal funds rate at 0 to 1/4 percent and to reaffirm in its postmeeting statement that the Committee’s decision about how long to maintain the current target range for the federal funds rate would depend on its assessment of actual and expected progress toward its objectives of maximum employment and 2 percent inflation. Members agreed that the Committee’s evaluation of progress on its objectives would take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. They also agreed to indicate that the Committee continued to anticipate that it would be appropriate to raise the target range for the federal funds rate when it sees some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term. It was noted that the expected path of the federal funds rate, rather than the exact timing of the initial increase, was most important in influencing financial conditions and thus the outlook for the economy and inflation. The Committee reiterated its expectation that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress–both realized and expected–toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.

Minutes of the Federal Open Market Committee

July 28-29, 2015

The Committee agreed to maintain the target range for the federal funds rate at 0 to 1/4 percent and to reaffirm in the statement that the Committee’s decision about how long to maintain the current target range for the federal funds rate would depend on its assessment of actual and expected progress toward its objectives of maximum employment and 2 percent inflation. Members also agreed that their evaluation of progress on their objectives would take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. To further reflect the Committee’s assessment that economic conditions had continued to progress toward its objectives, the Committee slightly altered its characterization of when it anticipates that it will be appropriate to begin the process of policy normalization. Specifically, members agreed to indicate the Committee’s anticipation that it would be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress–both realized and expected–toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.

Even though the US added an additional 211,000 jobs for the month of November, the number of Americans who are not participating in the work force again exceeded 94 million for what is now the fourth month in a row, according to data released by the Labor Department on Friday.

us hourly wages

The Bureau of Labor Statistics (BLS) reported that 94,446,000 people aged 16 and over in the U.S. were neither employed nor had they made an effort to find work in the prior four weeks during the month of October.

The participation number represented a decline of about 67,000 people from October’s participation number and a decline of 164,000 people compared to September’s record when 94,610,000 Americans were not actively participating in the workforce.

Actual Unemployment Rate November 2015

Even though fewer Americans were out of the labor force, the labor force participation rate remained low, at 62.5 percent. The participation rate went up only 0.1 percentage points from last month; however it continued the trend of participation rates in recent months hovering around levels not seen since the late seventies.
The unemployment rate was 5 percent and 149,364,000 were employed. Of course, because of the way the government reports unemployment numbers, the actual unemployment rate according to shadowstats.com was 22.9%, which is over 350% higher than the official numbers.

Additionally 7,937,000 were unemployed and 5,636,000 wanted a job last month.

unemployment rate november 2015

Here is a link to
http://www.federalreserve.gov/monetarypolicy/fomcprojtabl20150917.htm

Upcoming Federal Reserve News

December 16FOMC Meeting
Two-day meeting, December 15-16, 2015
December 16Industrial Production and Capacity Utilization – G.17
9:15 a.m. ET
December 25Holiday – Christmas Day
The daily and weekly statistical releases scheduled for today will be released on Monday, December 28.

Let’s see what happens, comment below with your thoughts.

Thanks,

Nick Giammarino
nick giammarino

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