The Fed, looking to skirt blame for creating what could be one of history's greatest stock market bubbles, will raise rates soon. Rising rates will only strengthen the dollar that's already rising due to economic uncertainty throughout Europe and Asia.
Eventually, the rising dollar - the driver of falling commodity prices and savior of the American consumer (through falling gasoline prices and so on) will send the US economy into contraction (oops). This transition from the economic plateau of prosperity to panic, a clear lesson from history, will be missed by the majority. This means plenty of economic and financial pain.
Headline: The Fed flirts with an interest rate hike
It’s a foregone conclusion in the financial world-- the Federal Reserve is going to begin raising interest rates soon. The big question is…when?
In 2008, the Ben Bernanke-led Fed slashed short-term rates to basically zero during the height of the financial crisis, as the global economic system teetered on collapse. The move was designed to pump much-needed liquidity into the economy. The Fed then followed that with several versions of “Quantitative Easing”-- bond buying programs that poured trillions of dollars into circulation.
But those “QE” purchases ended in October. And with the recovery well underway, the now Janet Yellen-led Fed is looking to finally start tightening the money supply without throwing a monkey wrench into the comeback.
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