• US Federal Reserve raises interest rates by 0.25.
    34 replies, posted
[QUOTE]US Federal Reserve has raised interest rates by 0.25 percentage points, its first increase since 2006. The move takes the range of rates banks offer to lend to each other overnight - the Federal Funds rate - to between 0.25% and 0.5%. The US central bank also raised its projection for economic growth next year slightly, from 2.3% to 2.4%. That suggests the bank does not think the rate increase will damage growth. US share markets jumped in response. The Dow Jones went from a 50 point rise to stand up 79 points at 17,612.79, a 0.5% gain. Rates in the US have been at near-zero since 2008. [/QUOTE] [url]http://www.bbc.co.uk/news/business-35117405[/url] Only just out now, will update when BBC does. Another source: [url]http://www.telegraph.co.uk/finance/economics/12054025/US-federal-reserve-raise-interest-rates-hike-december-live.html[/url] [QUOTE]Fed policymakers see "only gradual" rate increases As expected, policymakers have stressed that future increases will be slow, with "gradual adjustments" expected to help the economy.[/QUOTE] First time in nearly a decade, last raise was 2006.
Is this good or bad?
Probably bad. Especially if it effects federal student loans.
Really, neither. It's just a minor correction.
[QUOTE=Svinnik;49330618]Is this good or bad?[/QUOTE] To be honest nobody is really quite sure yet. A higher interest rate means borrowing costs are going to be a bit higher, inflation will come down a little bit, and (that's the idea anyways) economic activity might slow down a little too. But its a small increase and everybody has had years to anticipate it, so the impact shouldn't be massive.
Isn't this like the standard thing to do since the economy is a bit stronger?
Welp, this just confirms what everyone is saying. Put on those hardhats boys and gals, shit is going down the train.
It's a good thing if we've recovered enough from the Great Recession that the Fed has to actually [I]limit [/I]growth, even if it's by a small amount.
[QUOTE=JoeSkylynx;49330673]Welp, this just confirms what everyone is saying. Put on those hardhats boys and gals, shit is going down the train.[/QUOTE] what do you mean shit is going down the train?
[QUOTE=JoeSkylynx;49330673]Welp, this just confirms what everyone is saying. Put on those hardhats boys and gals, shit is going down the train.[/QUOTE] Shit's not going down the train. An interest rate rise, especially one this modest, usually means the Fed is confident in the economy. Unemployment is low in the US right now (almost too low actually) and inflation is slow and steady - things are pretty healthy. The rate increase is only a reflection of that.
[QUOTE=JoeSkylynx;49330673]Welp, this just confirms what everyone is saying. Put on those hardhats boys and gals, shit is going down the train.[/QUOTE] Naw when shit hits the fan the interest rate is lowered. One good thing of this is it allows them to lower it, incase of recession fears later on. It is causing a ruckus tho and for a short time investors will be spooked.
[QUOTE=Svinnik;49330618]Is this good or bad?[/QUOTE] Good in case we have a problem, bad if the markets react poorly, but the indication is they had ample time to react to this and has not affected anything Mainly the feds are hedging themselves against future problems because they can now lower rates, something they couldn't do before
[QUOTE=JoeSkylynx;49330673]Welp, this just confirms what everyone is saying. Put on those hardhats boys and gals, shit is going down the train.[/QUOTE] what is everyone saying, exactly?
[QUOTE=Sobotnik;49330688]what do you mean shit is going down the train?[/QUOTE] Perhaps he has an economic interest in manure freighting.
[media]https://twitter.com/BreakingNews/status/677232720796323840[/media] bit early, but good signs so far
This is probably a good thing, if you are unsure what this means go study some basic macroeconomics before freaking out. [url]http://www.economicswebinstitute.org/glossary/interest.htm[/url]
this is a good thing - sign the economy is improving. Australian economy is set to improve as a result of this as well
Just means we have confidence in our economy. If you have a variable rate student loan you should be watching this stuff very closely.
Wow I'll get 20 cents / month instead of 10 cents now :why:
[QUOTE=Sobotnik;49330632]To be honest nobody is really quite sure yet. A higher interest rate means borrowing costs are going to be a bit higher, inflation will come down a little bit, and (that's the idea anyways) economic activity might slow down a little too. But its a small increase and everybody has had years to anticipate it, so the impact shouldn't be massive.[/QUOTE] SMALL increase? think about it for a second, many people in the modern world have loans over 100,000 for house mortgages and so on.... [del]0.25% of that is 25,000! not a small amount.[/del] math fail. It's $250...
[QUOTE=nuttyboffin;49332112]SMALL increase? think about it for a second, many people in the modern world have loans over 100,000 for house mortgages and so on.... 0.25% of that is 25,000! not a small amount.[/QUOTE] [img]https://i.gyazo.com/284e1ef156858db0a9a99567f62367b4.png[/img]
[QUOTE=Sobotnik;49332124][img]https://i.gyazo.com/284e1ef156858db0a9a99567f62367b4.png[/img][/QUOTE] Oops, I did 0.25 not 0.0025... I'm an idiot! Still.. that's $250 of $1 hookers I can't buy this year ;(
[QUOTE=Svinnik;49330618]Is this good or bad?[/QUOTE] depends holding any bonds?
Hmm what no one here is mentioning is the fact that this will further boost the value of the dollar, which is already strong. This will make exports more expensive. [url]http://www.wsj.com/articles/u-s-businesses-worry-stronger-dollar-may-weigh-on-growth-and-exports-1450303529[/url]
[QUOTE=Antlerp;49332344]Hmm what no one here is mentioning is the fact that this will further boost the value of the dollar, which is already strong. This will make exports more expensive. [url]http://www.wsj.com/articles/u-s-businesses-worry-stronger-dollar-may-weigh-on-growth-and-exports-1450303529[/url][/QUOTE] on the upside it'll make imports cheaper
[QUOTE=Sobotnik;49332463]on the upside it'll make imports cheaper[/QUOTE] I could go for cheaper Pilot Iroshizuku prices... That stuff's $18 a bottle.
[QUOTE=woolio1;49332676]I could go for cheaper Pilot Iroshizuku prices... That stuff's $18 a bottle.[/QUOTE] You could buy about five tanks of liquid nitrogen for that much
They held off on the rate hikes for so long that it had to happen eventually. Just sucks that it has to hit during Q4 when stocks are generally at their lowest and everyone is spending money on presents. Of course, I'm coming at this like an investor, so it's a little biased, but overall, it's a good thing that the Fed raised the interest rates. Such a moderate hike as well. Besides, this is why you get fixed interest loans in the first place. The rates rarely fall, and there are an infinite number of reasons to raise them. You can always refinance at a lower rate if you need to.
[QUOTE=mcgrath618;49332753]You could buy about five tanks of liquid nitrogen for that much[/QUOTE] Yeah, but I can't fill a fountain pen with liquid nitrogen.
[QUOTE=woolio1;49333013]Yeah, but I can't fill a fountain pen with liquid nitrogen.[/QUOTE] maybe you haven't tried hard enough
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