If Fed Raises Rates, Signals Weaker Economy To Come Due To Trade Wars

[DonViejo]

By Associated Press

September 26, 2018 6:38 am

WASHINGTON (AP) — The Federal Reserve is set Wednesday to raise interest rates for a third time this year and possibly modify the likely direction of rates in the months ahead.

The big question is whether the strong U.S. economy, which has been fueled this year by tax cuts and increased government spending, could weaken next year, especially if President Donald Trump’s trade fights begin to inflict damage and the benefits of tax cuts start to fade.

If the Fed finds that prospect likely, it might signal Wednesday that it expects to slow its rate increases next year.

The Fed’s key short-term rate now stands in a range of 1.75-2 percent after two quarter-point increases in March and June. A similar rate hike Wednesday would raise that range to a still-low 2-2.25 percent.

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https://talkingpointsmemo.com/news/fed-poised-to-raise-rates-weaker-economy-to-come

[dalton99a]

1. The Trump recession is coming.

It is inexorable

[durablend]

4. To be blamed on Democrats

Count on that.

[el_bryanto]

2. It would be a clear sign, but I don't expect it to happen for two reasons

I don't think the Fed will want a fight with the President and I don't think that the principal beneficiaries of the federal banking system would want it either (i.e. Financial Institutions such as Goldman Sachs).

Bryant

[JCMach1]

3. Inflation first, recession later

Go grocery shopping today and tell me what you see...