Yellen signals readiness for Fed rate increase

[mahatmakanejeeves]

Source: Reuters

Markets | Wed Dec 2, 2015 1:15pm EST
Yellen signals readiness for Fed rate increase

Federal Reserve Chair Janet Yellen said on Wednesday she was "looking forward" to a U.S. interest rate hike that will be seen as a testament to the economy's recovery from recession.
....

In prepared remarks, Yellen did not indicate if she still expected a rate hike would be warranted at the Fed's last remaining policy meeting this year on Dec. 15-16.

She said job growth through October pointed to a labor market that was healing but not yet at full strength. She also reaffirmed her view that the drag from abroad on U.S. economic growth and inflation would start to moderate next year.

Already, she saw risks from abroad as having dissipated since the summer, and noted that consumer spending was "particularly solid" and its outlook remained positive.

Read more: http://www.reuters.com/article/2015/12/02/us-usa-economy-instant-idUSKBN0TL26220151202

[jwirr]

1. A testament to the bankers and the 1% but I am not sure

it is a testament of anything for the rest of us.

[floriduck]

2. This increase is expected

to adversely impact Hillary more than anyone because of her ties to Wall Street and financial institutions. Prices will rise, people will bitch and Hill will get hit with heavy criticism. Poor thing.


Bern on, folks!

[jwirr]

3. Then at least we will get something out of it.

[whatthehey]

4. Ah consistency

Just about any discussion of the economy on DU gets legions of comments along the lines of...

People can't afford to buy things to drive economic growth. Everyone is hand to mouth buying food. There is no money left over to buy big ticket items. Only the rich can buy homes and any vaguely affordable house is snapped up by cash buyers who want to take the rental income.

Should sound familiar to any honest reader of this site.
So if that's true, the fucking interest rate won't mean shit to you now will it?. You're not paying interest rates on the rice and beans you buy at dollar stores are you (because of course the noble working poor never buy unhealthy food)? Nobody in the 99% can afford new cars or mortgages (despite sales of both being at very high levels). So anyone paying interest is by definition a 1%er who can well afford it.

Of course that's bullshit, because the basic DU truisms of 99% impoverished hand-to-mouth Goodwill-dressed Aldi-Fed multiple PT job-holding efficiency-sharing heroes and 1% Daddy-Warbucks Cruella DeVille billionaire monsters who burn $100 bills as cigar lighters are also bullshit, but a huge plurality of people here will complain about raising interest rates while pretending that we live in a world where "real" people don't pay interest.

Take your pick guys.

And no interet rates do not necessarily, or even routinely, drive inflation, now less than ever. Why not? Corporations are sitting on trillions in cash making leveraging unnecessary; the greenest biz school finance grads know that interest rates have to go up soon and any funds they need are already earmarked; any consumer above Trump-voter level knows that any pending car purchase or remodel will be cheaper before that hike so they are working on it now; you'd have to be a certifiable moron to have taken out an ARM in the last 5 years at least as a homebuyer (unless perhaps you're on a firm two year remote job assignment) or not to have refinanced the one you have (my mortgage rate is 3% fixed, what the hell would make it lower enough to take that risk?). Instead what we'll get are seniors with sensible holdings heavy with cash and bonds more than a 1% return on their funds, investors who have other options than equities (that "rigged casino" DU doomers are so fond of) if they want more than that from their portfolios, and responsible savers who may actually get a dime or two back from their banks.