Friday, January 29, 2016

Let's play - what if.

This morning I checked interest rates and a lot of them were down in the 3.5% range. Yesterday they were in the 3.67-3.75% range. Much lower than when the Fed raised. I think everything at that time was in the 3.80 - 4.% range.

The whole recession - the lowest I remember them getting was in the 3.50ish range. Because rates have to be that low attract buyers. Especially refi's. That was enough to push rates back up.

So it's kinda confusing to see where they might go if the Fed were to take the hike away. And what if they do - and nothing happens?! A quarter point isn't going to stimulate anything.

I've also heard people now making bets the US could flirt with negative interest rates. I don't think we will go into negative rates because we are a reserve currency. I think it was more likely they try to keep the dollar strong, as if they need to work that hard - the world is a mess! When Brazil cancels Mardi Gras (a revenue generator) things are really getting crazy.

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