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Name:   Buteye - Email Member
Subject:   Just Curious
Date:   10/13/2018 12:54:50 PM

Does anyone else besides me have questions about the FED raising interest rates two weeks before the mid-terms? It appears very similar to Feinstein's holding on to Ford's allegations until they could do the most damage to Kavanaugh"s confirmation. Does anyone know the political affilations of those responsible for the decision to raise the rates at this exact time? Just curious?





Name:   Shortbus - Email Member
Subject:   Just Curious
Date:   10/13/2018 4:40:27 PM

I assume it has the effect of putting on the brakes while Trump is on the gas.





Name:   Talullahhound - Email Member
Subject:   Just Curious
Date:   10/13/2018 5:51:44 PM

They are supposed to be apolitical, focused only on the economy.  The head of the Fed was appointed by Trump.  I think it is just coinsidence that their monthly (quarlerly?) meeting fell just before the mid-terms.  But Trump sure isn't happy about it.  





Name:   GoneFishin - Email Member
Subject:   Just Curious
Date:   10/13/2018 5:58:18 PM

Surprise dude, 3 of the 4 members are Republicans.

The Federal Reserve consists of 7 members. They are appointed by the President and confirmed by the Senate. Currently, there are only 4 members and 3 seats have not been fllled by Trump. I assume he has been too busy playing golf and/or flying every other day on Air Force One. 

 

The current members of the Board of Governors are as follows:

Jerome Powell (Chairman) Republican Appointed by Trump

Richard Clarida (Vice Chairman) Republican

Republican Randal Quarles Republican

Lael Brainard Democratic

Vacant January 31, 2020

Vacant January 31, 2024

Vacant January 31, 2030





Name:   MartiniMan - Email Member
Subject:   Just Curious
Date:   10/15/2018 10:09:20 AM

The Fed sets it's guidance on a quarterly schedule.  While a gross oversimplification, what drives their interest rate is primarily their target inflation goal.  They look at the economic data and try to divine what inflation might do and if the economy is going strong they will usually raise rates to "cool" the economy off to stave off inflation.  Having said that, the Fed also has a history of overreacting and overreaching and that is a bipartisan problem.

But the Fed doesn't make these decisions in a vacumn and takes a lot of data and guidance from the regional Federal Reserve banks.  It's not at all uncommon for President's to not like what the Fed does.  Obama was all for the quantitative easing (a fancy term for printing money) by the Fed during his presidency because it kept interest rates down.  Had they raised rates during an already lackluster recovery he would have rightly thrown a fit.  Now we have a much stronger economy and the Fed is again fretting about inflation and is edging rates up.  Trump understands that this negatively impacts the stock market because now other investment vehicles start to have some appeal and that money is usually pulled out of the markets.  He also understands that higher interest rates will negatively impact the housing market.

So we've been on a QE binge for almost 10 years and the Fed is trying to come in for a soft landing.  History tells us they will fail and if they raise rates too quickly it could trigger a recession.  Such is the downside of that dismal of all sciences, economics.





Name:   Buteye - Email Member
Subject:   Just Curious
Date:   10/15/2018 12:18:09 PM

Thanks for your explanation. Just wish the rise in rates would have held off a couple of more weeks. There is probably a limiited understanding among the general populace how the FED works and changes like this that occur at crucial times can have an unwanted and misunderstood affect.







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