Monday, December 7, 2015

Fed trapped on rate hike decision as U.S. is in recession no matter how you spin the numbers

On Dec. 5, two interesting data points that are indicating that the U.S. is now in a recession has the Federal Reserve trapped by their own rhetoric and deceptions.  First, exports by U.S. companies dropped to a three year low as they fell ‘unexpectedly’ due to a stronger dollar and less consumerism from country’s already in their own economic downturns.  In addition, a new forecast by J.P. Morgan Chase put recession at a 76% probability, despite the so-called low unemployment numbers and near record stock market values.
Thus for the central bank, to raise rates now pushes an economy already in recession into much greater straits as there is no current indication that we have any asset inflation of note, and a rate raise would be a meaningless gesture since very little of the Fed’s trillions in Quantitative Easing (QE) ever went towards growth and real economic recovery.


Post a Comment