The Federal Reserve
has increased the interest rate they charge to banks 7 times since 1/1/17.
Trump was elected. Obama had crashed the economy, but was gone. The Federal
Reserve joined in to do what they could to crash Trump’s economic recovery.
The seventh time was a
charm.
2017 & 2018 Fed
Funds Interest Rates
3/16/17 1.0%
6/15/17 1.25%
12/14/17 1.5%
3/22/18 1.75%
6/14/18 2.0%
9/27/18 2.25%
12/19/18 2.5%
2019 2.8% planned
On 12/19/18, the Fed
killed the Bull Market we have seen since the 2008 Mortgage Meltdown when the
Dow collapsed to 6,726.02.
Interest rates will
increase by 0.25%, so all loans tied to the Prime Rate will go up. Mortgage rates are 4.5% on 30 year loans.
On 11/11/16, the Dow stood
at 18,847.66.
On 9/20/18 the Dow hit its
peak at 26,656.98.
By 12/12/18 the Dow had
dropped to 24,682 on rumors of a Fed Rate hike.
The Fed rate hike was
announced on 12/19/18.
On 12/19/18 the Dow closed
at 23,323.66.
On 12/20/18 the Dow closed
at 22,853.02.
On 12/21/18 the Dow closed
at 22,445.37.
The Dow is at 22,445.34
and is down 4,211.61 points from its peak of 26,656.98 on 9/20/18.
It looks like the bottom
for the Dow is 22,000 and the top is 27,000.
Companies could scuttle their expansion plans and buy back their stock
and wait to see where the global market is going. What countries and companies
should do now is increase their productivity and that requires capital.
The economic fundamentals
in the US are still good and this stock market stunt is the market’s reaction
to the endless increases in the Fed funds rates.
Norb Leahy, Dunwoody
GA Tea Party Leader
No comments:
Post a Comment