Tuesday’s Fed Meeting
***Written By: Dann Mcnulty Stock Forum ID: WallStGolfer31***
So will this meeting signal and end to the 17 consecutive rate hikes we have seen since mid 2004? Mostmarket professionals think so. And so do I.
Why would the fed stop now? Well after three years of strong GDP growth, falling unemployment, and the highest corporate profits as a percentage of the GDP since the 1960’s, we’re starting to hit thetop of the hill on the business cycle, it was bound to happen.
The real question is, after almost two straight years of knowing the outcome of every FOMC meeting, do you ever remember how to gauge the fed? There is two main determinants that the fed looks at to see if they feel the need to raise or lower the Fed Funds Rate.
Those two things are Inflation and Job Growth.
Of course they look at all the different economic indicators, but these two things, inflation and job growth, are what they really have their eye on.
Knowing this, you can see why market professionals are looking for a pause. We had lower than expected job numbers and unemployment jumped .2% This shows weakness in the economy, at least for now, and that will hold the fed back from another 25 basis point move.
