{"id":356,"date":"2010-02-19T10:25:00","date_gmt":"2010-02-19T15:25:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=356"},"modified":"2018-08-21T09:09:52","modified_gmt":"2018-08-21T13:09:52","slug":"the-fed-raises-an-interest-rate","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/02\/19\/the-fed-raises-an-interest-rate\/","title":{"rendered":"The Fed raises an interest rate"},"content":{"rendered":"<p><span style=\"font-size: 16px;\">Hello again,<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Yesterday afternoon the Federal Reserve indicated that it was raising the discount rate (an interest rate it manages) by 0.25%.\u00a0 The discount rate is the rate that the Federal Reserve charges banks who must borrow money to meet reserve requirements at their institutions.\u00a0 The Fed emphasized that this move was not the first of more interest rate increases.<\/span><\/p>\n<p><span style=\"font-size: 16px;\"><strong>Analysis:<\/strong> I would expect the stock markets to have a queasy sell-off this morning.\u00a0 When the Federal Reserve increases the price of money, that is interest rates, the cost of doing business around the globe increases.\u00a0 Usually stock market investors don&#8217;t like this.\u00a0 This is because most businesses finance a portion of their growth projects with some form of debt.\u00a0 Consequently, it can be assumed that the Fed feels that businesses are better able to overcome these costs.\u00a0 So, in contrast to the way the\u00a0markets are likely to respond, I feel the rate increase is a bullish sign from the Federal Reserve.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Yet, it is also true that the Federal Reserve has pumped billions upon billions of dollars into the U.S. economy.\u00a0 If unchecked that cash tidal wave <strong>will<\/strong> lead to inflation and likely to another asset-bubble.\u00a0 So the Fed&#8217;s move is also an indication that it feels the need to start to move against inflation.\u00a0 It also is an indication that the Fed is starting to shift its gaze from the economy to inflation.\u00a0 Again, this, to me, is a bullish sign.<\/span><\/p>\n<p><span style=\"font-size: 16px;\"><strong>Importance grade:<\/strong> 8; this is the first time in a looooong time that the Federal Reserve has raised interest rates and is likely a sign that the Fed is confident that the U.S. economy is well on its way to recovery.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hello again, Yesterday afternoon the Federal Reserve indicated that it was raising the discount rate (an interest rate it manages) by 0.25%.\u00a0 The discount rate is the rate that the Federal Reserve charges banks who must borrow money to meet reserve requirements at their institutions.\u00a0 The Fed emphasized that this move was not the first [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-356","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/356","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=356"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/356\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}