Friday, June 05, 2015

This is going to hurt.


Source.

I think it was two weeks I broke with my long standing feeling the Fed was not going to raise rates any time soon. The drum beat was just so loud by the media that I felt that they were trying to distort reality enough to raise rates. Then for the last week I felt I was wrong because the media started saying they weren't going to raise rates.

After reading the news this morning - I'm back to thinking they will raise rates no matter what the economy looks like. They seem to really be massaging the data. They claim the rate hike will be in Sept now. Which seems totally bizarre to me. That is almost the Christmas window. That seems to me like all hell will break loose. It will impact Christmas sales. I don't know which way they will go now. But this is what happens to apps when mortgage rates are in the 4% range.

I personally think that people underestimate how much damage the strong dollar is causing right now. I think the data will look worse in Sept. But I still think there is a good chance they will raise rates. Their window is really closing. They either have to raise rates this year, or do it next year in an election season.

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