Wednesday, February 18, 2015


Econ Comments & Analysis                                                                                            
CNBC | Is a June rate hike coming? Traders say one thing, economists another
There's a major debate brewing in the financial markets, and it concerns the most important potential event of the year for stocks and bonds alike: the timing of a Federal Reserve rate hike.
Forbes | 18 Trillion Reasons Why Interest Rates Will Stay Low
The Federal Reserve has continued to announce its intention to begin raising its interest rates sometime this spring, yet the market remains skeptical. U.S. government 10 year bonds have risen about 40 basis points in the last two weeks, so the bond market might believe the Fed a little. However, 30 year fixed rate mortgage rates are at or near six month lows and seem to be heading lower. That mortgage lenders are willing to lock in low rates for 30 years suggests they don’t believe the Fed will raise rates, or that higher Fed rates will not lead to any particular increase in inflation or their cost of funds for the foreseeable future. Given that the Fed has been as explicit as ever in its history about its intentions, why are the markets so unsure about interest rates rising? There are 18 trillion reasons.

Wall Street Journal | Fed Minutes Will Show How “Patient” Debate is Evolving
Minutes of the Federal Reserve’s Jan. 27-28 policy meeting, to be released today, could reveal the contours of its discussion about forward guidance on interest rates.