What happens if interest results stay so low/decline even further? (user search)
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  What happens if interest results stay so low/decline even further? (search mode)
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Author Topic: What happens if interest results stay so low/decline even further?  (Read 1238 times)
Sprouts Farmers Market ✘
Sprouts
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Posts: 14,791
Italy


Political Matrix
E: -4.90, S: 1.74

« on: October 27, 2015, 08:42:45 PM »

Eventually, the market will correct itself.

Hot take. I hear the robotic indoctrinated response. Is the market not correct now? Is there not a saving glut? How are these savers supposed to just change what they are doing?

People play the role they are dealt in the economy. What would savers do when they are unhappy with the price they are receiving for lending out their money? Just work less? Or consume more today? But all those people are saving for homes (and retirement and yada yada) eventually. They have no option but to save in reality. That will of course change when they decide to put down a down payment and become a borrower, but that isn't a correction. That's just the natural life cycle of a human being.

I have little doubt they will go up eventually, but that doesn't mean they aren't correct.
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Sprouts Farmers Market ✘
Sprouts
Atlas Icon
*****
Posts: 14,791
Italy


Political Matrix
E: -4.90, S: 1.74

« Reply #1 on: October 28, 2015, 09:12:39 AM »

If Congress passes the current budget deal and averts a government shutdown/default, there is going to be enormous pressure on the Fed to raise interest rates come December. Central bankers see the specter of inflation everywhere.

That's not what the Fed was saying last month. That was a complete reversal thanks to pressure from the worldwide slowdown (i.e. everybody but us). Imo, I'd say March at the earliest, and that's being conservative since I really don't want to speak according to a time horizon.
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