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Fed’s Williams says ‘very strong case’ to raise rates next month
There are still 5 more weeks – – and lots of crucial data – – to come before the Fed makes the decision at its final meeting of the year. Investors are positive of a rate hike this December, which according to them will benefit all banks by raising their margins on every transaction made.
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The signals are clear right now for a rate hike. “The trend in commercial real estate prices should be thoughtfully monitored”. Using the correct metrics may lead to excellent picks at bargain prices.
ING Bank economist, Rob Carnell, said United States rates looked nearly certain to rise in December unless the next jobs report in November was “catastrophically bad”. “I don’t necessarily foresee the dollar index puncturing aggressively above the highs of the year”. The sudden boost of the employment rate has rendered the unemployment rate at a seven and a half year low of 5 percent.
Before this news, the market sentiment had been moving in that direction, as the market for interest rate futures had moved the probability of a December move up to a 50-50 level last week. Volkswagen representatives haven’t commented for now, but the Wall Street Journal reports that dealerships were informed that owners of diesel-fueled cars would be given cash via two debit cards: one as a cash gift, the other linked to VW dealership purchases. “That could be a hurdle for the dollar bulls”. “To a few extent, the Fed and the dollar is a little bit incidental”. At one point, the Bloomberg Dollar Spot Index climbed to its highest level recorded in more than a decade. A rate hike would be the first step toward reversing its unprecedented efforts to stimulate the economy.
Such a feeling emanates from the events of October. And centrist policymaker John C. Williams, San Francisco Federal Reserve Bank President, believes it may be high time to raise interest rates. Consumers, the biggest driver of the USA economy, are still spending at a healthy clip, supported by lower gas prices and a recovery in the stock market. Unlike Europe, several emerging economies and, most importantly, China, the economy of the USA continues to experience steady growth.
Are REITs Still Worth Investing In? Small business borrowing also increased and the overall U.S. trade deficit narrowed to its smallest it 7 months.
But now that a hike appeared imminent, markets were actually quite sanguine, brokers Capital Economics noted.
I have also written about this possibility before and do not find the drop to parity unreasonable.
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A worrying factor will be if we get both equities and the USA dollar rallying strongly towards the end of the year. Our selection is also backed by a good Zacks Value Score and Zacks Rank. A value-based approach would aid you in making prudent additions to your portfolio.