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Why the FEDERAL RESERVE could justify raising interest rates in 2016


Why the FEDERAL RESERVE could justify raising interest rates in 2016

Today is Tuesday 29th March 2016 and we are putting the case as to why the US Federal Reserve could justify raising interest rates.
Now before we do that we wish to point out that we do not believe it will happen in April but it’s possible and that any rate rise would be limited to 0.25%.

Here are some justifications for such a rise:

1. Increasing inflation
2. Positive Employment data
3. Stabilised Stock Market levels
4. Imports/Exports
5. Value of the Dollar

More than four-fifths of economists polled recently by the Financial Times said the Fed would lift rates two times or fewer this year. One believed the Fed would be forced to cut rates by December. They believe the uncertain outlook for global growth will not stand in the way of the Central Bank resuming its path towards normalisation in June.

Our view is quite simple, providing the Government’s statistics are accurate another 0.25% rise in interest rates is quite possible based on the factors already mentioned. We feel however that the FED wishes the dollar to remain at current levels for the time being to aid exports and meanwhile Yellen and her fellow FED members will continue with the hawkish and dovish comments – to manipulate the dollar value without having to raise or lower rates. Nevertheless, we stick by our forecast that rates will rise once this year – when? No-one knows, but the FED realises that it has to be seen to follow through at some stage – as it did last year - in order to maintain its credibility.

For interest silver prices fell earlier today to as low as $15.07 and now stand, as a result of Yellen’s dovish comments at $15.34 – who says no-one cares what she says?

The FOMC next meets on April 26th and 27th – what do you think will happen then?

Please view our recent videos:

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