PeakTrader.com Forum Index PeakTrader.com
Economics, Portfolio Optimization, and Technical Analysis
 
 FAQFAQ   SearchSearch   MemberlistMemberlist   UsergroupsUsergroups   RegisterRegister 
 ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 
Log inFast Charts

Monetary Policy

 
Post new topic   Reply to topic     PeakTrader.com Forum Index -> Articles
View previous topic :: View next topic  
Author Message
administrator
Site Admin


Joined: 28 Dec 2005
Posts: 10288

PostPosted: Sun Feb 07, 2016 8:05 pm    Post subject: Monetary Policy Reply with quote

PeakTrader:

Yes, however, the Fed may be anticipating faster growth (reflected in the Atlanta GDP-Now model). I agree, the FOMC should tighten more slowly. The consensus a month ago was a 1.25% Fed Funds Rate by the end of 2016.

****

The Fed may be expecting faster wage increases, from a tightening labor market, and low commodity prices, including oil, to continue.

It may want to let some air out of any asset bubbles slowly than (potentially) suddenly later. It seems to be a cautious move, at this point.

****

Itís important not only to make it cheaper to borrow, but also easier to borrow. An increase in borrowing will raise spending and investment to generate income and employment. When a virtuous cycle takes hold, that raises income = consumption + saving and move the economy towards full employment, then borrowing can become more expensive and more difficult to slow the expansion to a sustainable rate. There are still massive idle resources, e.g. labor and capital, that need to be employed. The economy is underproducing between $1 1/2 trillion and $2 trillion a year.

---
Back to top
View user's profile Send private message
Display posts from previous:   
Post new topic   Reply to topic     PeakTrader.com Forum Index -> Articles All times are GMT - 8 Hours
Page 1 of 1

 
Jump to:  
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum


Powered by PeakTrader 2.0.8 © 2001, 2002