I’ve been reading a lot of articles over the last several days regarding the Federal Reserves intent to increase interest rates during Trumps first year in office. First let me point out that these interest rates determine how much the FED charges other banks who want loans from them.
Throughout the Obama regimes entire stewardship the FED has kept interest rates at near zero in an attempt to support failed economic policies of the regime. The Japanese did the same thing for years with disastrous results. By keeping interest rates near zero Japan was able to avoid painful market corrections that would have hurt them in the short run but would have eventually resulted in economic growth. Instead, by falsely propping up their economy unnaturally by manipulating their interest rates Japans economy flattened and growth ( a requirement for a healthy economy) stagnated. Having traded currencies on the world stage for several years I saw this first hand as trading the Yen became a suckers folly.
Many in the media (especially on the right) are trying to make the case that the FEDs recent announcement regarding up to 3 interest rate increases during Trumps first year in office is an attempt to derail Trumps presidency and nothing could be further from the truth. Even if you do not have much of an understanding of world economics this should sound like nonsense to you.
The FED is a cartel of banking firms who, like any other business seeks to profit. Like any other business it will charge what the market can/will bear. So if the FED has very low interest rates one can deduce that the market is weak because it cannot bear more. Consequently if the markets are doing well the FED can charge more for its loans because the market can bear it. Just like any other business.
The only reasonable conclusion that can be made as a result of projected Reserve interest rate hikes is that the FED expects the economy to improve significantly and given their announced 3 increases very rapidly and we are already seeing the seeds of this potential economic boom unfolding as companies have been announcing more interior investments and jobs coming to a neighborhood near you soon. And of course the domino effect will be that other businesses will profit and expand because of what these companies intend to do.
The FED raising interest rates is a great thing and don’t let anyone try to convince you otherwise. It is a clear sign that Trumps election has turned the economic tide and that the 93+ million American workers who have given up even looking for work have new hope and that very soon they will be able to enter the workforce again.
Donald J. Trump claimed that he would become the greatest job creating president in history if elected. He isn’t even the president yet and that promise sure seems to be being kept. Just imagine what this man is capable of doing for the people once he actually takes office. It just warms the heart doesn’t it!