interest rates

Interest Rates: Six Reasons They Are Going to Go Up

By Monday, June 22, 2015

Interest RatesThe Federal Reserve provides projections on U.S. gross domestic product (GDP) four times each year; in March, June, September, and December.Just a few days ago, the Fed released its June projections. The Fed expects the U.S. economy to grow between 1.8% and two percent this year. (Source: Federal Reserve, last accessed June 17, 2015.) The mainstream will take this number and run with it. But what you won’t hear. Read More

U.S. Mortgage Applications Spike 8% in Advance of Rate Hikes

By Thursday, June 11, 2015

Mortgage ApplicationsSoaring mortgage applications are usually an indication of a strong economy, but the recent bump in volume could actually signal that problems are ahead.On Wednesday, the Mortgage Bankers Association reported that total U.S. mortgage application volumes jumped 8.4% from the previous week on a seasonally adjusted basis. The refinance share of mortgage activity remained unchanged at 49% of total applications from the previous week. The adjustable-rate mortgage (ARM) share. Read More

Bond Market Facing Scrutiny; Why Stocks Could Face Same Future

By Friday, June 5, 2015

Bond MarketOver the past few years, buying bonds was the trade. Be it government bonds, municipal bonds, or high-yield corporate bonds. Thanks to the Federal Reserve, every time interest rates were lowered, or every time there was an announcement of new quantitative easing by the Fed, bond prices soared and investors in those bonds made a lot of money.Now bond investors aren’t looking so happy. The Federal Reserve, with its. Read More

IMF Says Fed Should Delay Interest Rate Hike Until 2016

By Thursday, June 4, 2015

IMF: Federal Reserve Should Wait Until 2016 to Raise Interest RatesOn Thursday, June 4, 2015, the International Monetary Fund (IMF) urged the Federal Reserve to delay its interest rate hike until 2016 while it downgrades the U.S. economy’s outlook. (Source: Associated Press, June 4, 2015.)The IMF said, “The underpinnings for continued growth and job creation remain in place.” But America’s “momentum was sapped in recent months by a series of negative shocks,” including a harsh winter and a strong. Read More

Fed’s Brainard: Not Seeing Significant Q2 Bounce Back

By Wednesday, June 3, 2015

Feds BrainardOn Tuesday, June 2, 2015, a voting member of the Federal Open Market Committee (FOMC), Lael Brainard said that current economic data does not suggest that the U.S. will see a significant second-quarter rebound. She also stated that a strong dollar delays U.S. interest rates to nominal levels. Despite the disappointing economic data, she mentioned that a 2015 rate hike is still possible. (Source: Federal Reserve, June 2, 2015.)“No. Read More

Rising U.S. Dollar an Obstacle for U.S. Multinational Corporations

By Wednesday, May 27, 2015

Rising U.S. DollarThe U.S. dollar has risen significantly against other major currencies over the last few months. This already has and will continue to negatively affect U.S.-based companies with global operations.This isn’t rocket science; as the U.S. dollar increases in value, companies with business outside of the U.S. will have to convert their revenues into the greenback; which will now have less value than it used to.U.S. Dollar Already Hurting . Read More

Interest Rate Hike by the Federal Reserve Will Impact These Three Places

By Monday, May 25, 2015

Interest Rate HikeEarlier this year, the Federal Reserve hinted that it would raise the federal funds rate this year.On May 22, 2015, Federal Reserve Chair Janet Yellen stated, “For this reason, if the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target.”(Source: Federal Reserve, last accessed May 22, 2015.)While. Read More

Interest Rate Hikes May Cause Another Recession

By Thursday, May 21, 2015

Interest Rates to RiseLow interest rates create an incentive for retail investors, hedge fund managers, and banks to consider riskier assets that offer higher returns. Cheap money also makes it easy to borrow when the return exceeds the cost of borrowing.When short-term interest rates are low and unstable, investors are hesitant to borrow more and leverage their position. But when interest rates are stable, investors are more willing to assume the risk. Read More

U.S. Housing Market: Worries Increasing, Buyers Dwindling

By Wednesday, May 20, 2015

U.S. Housing MarketThe Federal Reserve is expected to raise interest rates in September. When this happens, I expect the U.S. housing market to become one of its first and biggest victims.You must remember that the housing market and interest rates have a negative relationship. If interest rates rise, home prices suffer. This is basic economics.The Impact of the Federal Reserve Interest Rate HikeInterest rates haven’t even gone up, yet. Read More

China Lowers Interest Rates for the Third Time in Six Months

By Tuesday, May 12, 2015

China Lowers Interest RatesOn Sunday, May 10, the People’s Bank of China (PBOC) announced that it will lower its one-year benchmark lending rate by 25 basis points to 5.1%. They also cut the one-year deposit rate by the same amount to 2.25%. This is the third interest rate cut by China’s central bank in six months.Markets in Asia welcomed the expansionary monetary policy from the PBOC. In mainland China, the Shanghai Composite. Read More


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From: Michael Lombardi, MBA
Subject: Golden Opportunity for Stock Market Investors

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