With Oil Prices Way Up Today, Do You Think The Fed Will Raise Rates Tmrw?

Question

Most experts say there's an 80% chance the Fed will not raise rates tmrw. I believe the Alaska oil problem today will force the fed to raise one more time. I hope I'm wrong.

Answer 1

No, because the Fed Funds Futures are an excellent indicator and they are saying there is less than a 20% chance the Fed will raise rates this meeting. Nothing is certain but another reason is Bloomberg's columnist John Berry, who is said to be the "mouthpiece" of the Fed, said no hike also in his column today.

Answer 2

Oil Prices are up today, but that is purely on the prudoe bay problems associated with the BP plant up there. Eventually production should be back online, but the fed is mainly concerned with the speculations on inflation right now. I think they will most likely hold rates where they are, and at the most be have one rate hike. In my opinion, I would like to see the fed raise the fed fund futures 25 more basis points and get it over with. It is obvious that weakness has been occurring from the recent slur of economic data and earnings commentary from a considerable amount of companies. The thing that I will be paying attention to is the language statement the fed issues. If we get a clear indication on what the fed is thinking about doing at the next meeting. If they give us a clear statement on what they plan to do to the direction of the rate, we'll see a market rally. However, if they confuse us with non-sensical words, we will most likely see a market that will continued to be bound by a trading range. Hope we get the first option!

Happy Trading
-Paul

Answer 3

My bet would be 33 1/3% chance of a rates remaining at current level; 33 1/3% chance of a 1/4 pt. increase; and a
33 1/3% chance of UNKNOWN !
So my guess is the markets have discounted a 1/4% rate hike, and are wishing for, but afraid to discount rates remaining the same. My guess is that a 1/4 pt rate rise will cause a temporary market drop.
From my read of Fed Funds Futures on the CBOT, which are FLAT, they seem to hint at a FLAT, no rate hike scenario.
From my read of the 30 yr, 10 yr, & 5 yr Fed Bond rates, they seem to be flat, to down, with downward momentum developing. That indicates to me the potential likelihood of of a Rate Remaining where it is. It also points to the fact that we have an electiion coming up, where the Administration must make the popluation "Feel Good"; therefore, future Rate Reductions ARE NOT ruled out.
Financial stocks are rallying to neutral, depending on the unit, which portends a FLAT RATE.
Precious Metals and commodities prices are in a No-Hike mode, So my final SWAG (SCIENTIFIC Wild Eyed GGuess) is that the FED will leave the rate in place.
Energy prices might play a role in forcing the FOMC to consider the effect of the TOTAL PACKAGE of all the effects in the Macro-Economic Picture.
Raising rates due to a reduction in energy supply, which would of course shift the supply demand curve higher, would only further shift the price curve higher, worsening business conditions. Removal of liquidity from the system in May and June of this year caused a down market large enuf to be called a PANIC, so while I dont doubt that they could do such a thing, I certainly hope that their economoic education include demand/supply/price analysis.

Cross your fingers.

Answer 4

You are wrong...of course they will raise the rate.

The oil is not likely the cause, however. A drop in supply will force prices up but because of market demand, not due to inflation. The Feds will raise the prime in order to keep inflation in check. This doesn't mean your gas price isn't going to up, however.

Answer 5

The Fed may continue to raise rates, but not just because oil is up today. Our current account deficit and budget deficit require a foreign investment of 3 billion per day to fund. To keep foreign money flowing in, the Fed needs to keep the bond return high enough to continue to attract foreign investment. With the dollar losing 5% of its value to date this year, it becomes difficult to continue to attract foreign investment in our govt. bonds without continuing to raise the rate of return.

Answer 6

I don't think the Fed will raise rates, but not due to a short term spike in the price of fuel.

Answer 7

I specific wish not. I doubt they'll, regardless of if. Stagflation, regardless of if, could quickly grow to be a topic with increasing oil expenditures so as that ought to easily be a extensive subject all around. Rampant inflation mixed with out productiveness enhance could be a undesirable factor.

Answer 8

The Feds are like any other blood sucking leech of evil- they will keep sucking in the form of taxes and rules/regulations until we're in a police state.

The Feds work directly for Satan, and I can prove it.

Look in your bible to where Jesus is standing on the mountain and Satan is showing him all the kingdoms of the world "If you bow down to me I will give you all of this for it has been turned over to me"

Think on that verse- Satan himself was given this entire planet! The source of all evil is now in charge

Answer 9

I hope you are wrong too, but I am worried as well. I give it a 25% chance of being raised.

Answer 10

I would say they will raise rates again tomorrow. BTW There are no such things as experts. Just people who get lucky!!