Someone told me recently that the public has no interest in interest rates.


Besides scoffing at this person’s low-bar view of the public, I am also publicly disagreeing. 

Or, let me put it this way-if you represent John and Jane Q. Public and do not think rates are something you should at least have a rudimentary knoweldge about, think again.

They do affect you. And the market.

How do they affect you?

Up until recently, you got what my grandma would call “bubkas” when you put money in the bank.

Now, you will collect some interest. Many will view that as “safe” compared to the stock market.

Secondly, with rates rising and the dollar struggling, the cost of buying a house or refinancing an existing one will hurt you more.

Third, should the cost of goods go higher, then with higher rates and a lower dollar, that will pinch your already flatlined wages.

Now, the dollar may not go down. And the Fed could halt their promise of 2-3 more rate hikes this year.

However, if the trends stay their course, how does this fit in with the bleak market predictions this Year of the Brown Earth Dog?

“The Dog year will bring decline in economic growth and activities leading to longer-term setbacks of the stock market and more economic crises will come up.  As there will not be return of fire year until 2025, we expect a long lasting bearish market ahead.” Raymond Lo

Jerome Powell said, “Inflation on a 12?month basis is expected to move up in coming months and to stabilize around the committee’s 2 percent objective over the medium term.”

Furthermore, “the Committee seeks to foster maximum employment and price stability. The economic outlook has strengthened in recent months. The Committee expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in the medium term and labor market conditions will remain strong.”

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