will federal reserve halt rising interest rate after US economy shows sign of weakening?

Question

what percentage of interest rate increase from federal reserve is considered healthy for stock rally?

Answer 1

In terms of real interest rates (Fed rates - Inflation) t has not reached danger levels. Historically if real interest rates goes above 4% this is start to recession.

The reason for US interest hike to was slow down growth to a sustainable target GDP of 3.5% otherwise inflation will step in. Inflation due to higher cost of goods by increase in demand. Current indicators shows sign of healthy growth.

As most Americans have borrowed to their limits or even overborrowed, they would have felt the pinch of interest rate increase as well as the oil price increase too. Hence buying power not so good so less spending.

Sentiments of the market is still volatile. Most analysts are predicting a further correction in August and maybe a start of a rally in last quarter of this year as investors gain more confidence.

Answer 2

The Fed is very likely to halt interest rate hikes probably after their August meeting. Bernanke told Congress that the end of interest rate hikes was very soon and that the economy was moderating. The market is expecting at most a .25% increase and none thereafter. Anymore, and the market will drop.

Answer 3

It depends. The federal reserve was an inflation hawk, which would try to stop inflation at all costs. They might continue to do the same under their new leader.

Answer 4

Billion Dollar Question.

Answer 5

apparently wall street thinks they are going to stop



0 increase would be considered healthy. thats why there's a rally today