Tuesday, December 15, 2015

Fed Rate Hike Will Do More Than Gently Tap The Brakes of Economic Growth

In a world where people typically 'see' what they want to believe, the theory that a Fed will gently tap on the economy's brakes while boosting income to savers is widely accepted. The message of the market, however, is painfully clear. The US economy, anticipated by the Economic Activity Composite (EAC), has been contracting steadily since February 2015. Rising rates here will do a lot more than gently tap on the brakes of economic growth.

Headline: Fed rate hike likely to tap economy's brakes

The Federal Reserve's expected hike in its benchmark short-term interest rate this week — combined with rate increases the next few years — is likely to ripple across the U.S. economy, nudging up rates on everything from mortgages to bank savings rates and corporate bonds. But Fed policymakers have stressed they intend to move gradually and in small increments, and will pull back if the economy falters, tempering the impact on consumers and businesses.



Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.