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Fed rate hike likely to tap economy's brakes

14 Dec. 2015

Perhaps no sector has benefited more from ultra-low rates than housing, which was devastated by the real estate crash. Home sales are expected to total about 5.7 million this year, up from 5.4 million in 2014 and 4.6 million in 2011. The recovery can at least partly be traced to 30-year fixed mortgage rates that remain below 4%, down from about 6% in 2008, keeping borrowing costs low for buyers.

But today's housing market is supported by far more than low mortgage rates — namely steady job and economic growth. What's more, 30-year mortgages are priced off 10-year Treasury note yields, which do rise as short-term rates climb, but not as steeply.

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Why The Fed Will Not Be Raising Rates 

11 Dec. 2015 

The U.S. Federal Reserve has held interest rates near zero since December of 2008, and it does not seem as though they are going to raise them any time before the middle of 2016. The low inflation levels the U.S. is seeing, in addition to the uncertainty in China are reasons to be confident that the Fed will not be raising rates soon- especially not this December. 

The Fed has a dual mandate: ensuring maximum employment while at the same time keeping inflation levels at a target level of two percent. When it comes to unemployment, the Federal Reserve is seeing enormous success. The October jobs report, released in early November, was unexpectedly strong. The unemployment rate now stands at five percent, which is normally considered full employment by many economists. 

Read full article from Seeking Alpha

 

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Sturdy U.S. Employment Report a Green Light for December Rate Hike

04 December 2015

U.S. employment increased strongly in November in a show of the economy's resilience, which most likely paves the way for the Federal Reserve to raise interest rates this month for the first time in nearly a decade.

The unemployment rate held at a 7-1/2-year low of 5 percent, even as people returned to the labor force in a sign of confidence in the jobs market. The jobless rate is in a range many Fed officials see as consistent with full employment and has dropped seven-tenths of a percentage point this year.

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Oil Prices Fall on Fears of Increased U.S. Stockpiles

02 Dec. 2015

Oil prices fell on Wednesday on expectations that the U.S. crude stockpiles increased last week, adding to an expanding global surplus of crude. Industry group American Petroleum Institute reported late Tuesday that the U.S. crude inventories rose 1.6 million barrels last week.

Analysts surveyed by The Wall Street Journal expect inventories to have declined by 300,000 barrels. The U.S. Energy Information Administration will release the official data later Wednesday.The strong U.S. dollar is also weighing on oil prices on Wednesday.

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U.K. Factory Growth Cools From Fastest Pace in 16 Months

01 Dec. 2015

A U.K. manufacturing gauge fell more than economists forecast in November, while still signaling solid growth after reaching a 16-month high the previous month. The Purchasing Managers Index by Markit Economics declined to 52.7 from 55.2, below the 53.6 estimate in a Bloomberg survey of 27 analysts.

Readings above 50 indicate expansion. Publishing its report on Tuesday, Markit gave an upbeat assessment, saying the industry “maintained its positive start” to the fourth quarter. Demand continued to grow and new export orders rose at the fastest pace in more than a year.

Read full article from Bloomberg Business

 

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