Posted at 10:49 AM , on December 29, 2016
As the Fed hiked rates by 25 basis points on December 14th, it brought back memories of the last rate hike in December 2015 when the global markets lost nearly $12 trillion in terms of market capitalization. The question is whether such a scenario could replay again this time around. It is highly unlikely for 4 key reasons… Continue reading
Posted at 11:05 AM , on December 28, 2016
Key Pointers Emanating from the Fed Funds Meet in December 2016…
- The Fed in its December meet decided to hike the Fed Funds Rate by 25 basis points from the range of 0.25-0.50% to the new range of 0.50-0.75%. This rate hike comes a full 1 year after the rate was last hiked by 25 basis points in December 2015.
Posted at 6:36 PM , on October 16, 2015
Will the Fed bite the bullet in December and finally hike rates? Or will the Fed prefer to wait into 2016 before taking a rate hike decision. The rate hike was first due in June 2015, but till date it has not happened. There are a variety of reasons espoused for the same. The global economy is slowing down; even the IMF has downgraded global growth by 20 basis points. China is creating a global crunch due to a fall in demand. And higher rates mean a stronger dollar. A stronger dollar is already hurting companies like Apple, Microsoft and Wal-Mart. Even as the clamour to hike rates in December is growing, the Fed will be up against a plethora of hurdles before it can actually hike rates. What exactly are these hurdles?
Posted at 11:09 AM , on September 14, 2015
To hike, or not to hike, is the question…
If ever there was one topic on which the Fed seems to be incredibly divided; it is the subject of a Fed rate hike. As the Fed meets over the week end, the question is whether they will hike rates as promised. Or will the decision be put off till the volatility in global markets reduces?
Interestingly, the Fed itself is divided over the issue. After near zero rates for almost 7 years, the decision to hike rates is really a tough one. Here are the arguments that could go for and against the Fed rate decision.
Posted at 6:02 PM , on July 30, 2015
The Federal Open Market Committee (FOMC) meet that ended on July 29th still leaves the big question open; will the Fed hikes in September or will they postpone the rate hike? For one, the Fed has enough time till September 16th as there are no intermediate meetings scheduled. That will give the Fed a full 7 weeks to analyze data on growth, labour, wages and inflation before arriving at a rate hike decision. However, as one breaks up the press release issued by the Federal Reserve Board after the FOMC meet, it looks quite likely that the rate hike may be put off from September to December. Let us understand why! Continue reading