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

Fed & Asset Prices & Predictions

 
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: 11966

PostPosted: Sat Feb 20, 2016 6:55 pm    Post subject: Fed & Asset Prices & Predictions Reply with quote

PeakTrader:

The Fed had less control over asset prices than you think. The FOMC raised the Fed Funds Rate from 1% in 2004 to 5 1/4% in 2006, and left it at 5 1/4% till September 2007.

When it began the easing cycle, oil prices continued to soar reaching $150 a barrel by mid-2008. The only significant mistake the FOMC made was not beginning to ease sooner, I.e. early 2007.

****

And, the Fed had less control over the housing and student loan booms. Moreover, given trade deficits reached $800 billion a year in the mid-2000s, it had no control “refunding” U.S. consumers through tax cuts.

****

We may have had a “soft landing” already (from a low altitude).

You’ve heard the story of the tortoise and the hare?

Maybe, it’ll be steady and slow growth for an extended period of time.

And, won’t stop before growth accelerates.

****

Yet, the Fed has been a reliable predictor of business cycles, and fulfiller of smoothing-out business cycles

For example, the Fed began lowering the Discount Rate in August ’07 and the Fed Funds Rate in September ’07 before the economy peaked in December ’07.

The Fed knew quantitative easing was needed and knew it had to wait, until recently, before raising the Fed Funds Rate.

The Fed has been ahead of the curve. Also, it predicts how much money creation or destruction is needed to spur, sustain, or slow growth.

---
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