The Fed Holds The Cards: No Hike
After a 2 day meeting, the Federal Reserve has decided not to increase interest rates, much to the chagrin of the banks and other businesses but might be to the advantage to the consumer.
Fed Chairwoman Janet Yellen stated that the reason for the decision was due to the state of the global markets.
What Yellen is referring to, is the instability of the global sector. With China still cleaning up its act and conflicts in the Middle East, the surge of refugees, into Europe and other global disarray, the world doesn’t seem stable enough for anyone to bank on. On the other hand, had she boosted rates, it’s speculated that the banks would then be interested in lending more money as they stood to gain more profit.
That’s the theory anyway.
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The reality is that the underlying factors of the global economic turmoil of the past 15 years, has never been addressed by the US nor the world’s leaders. Corruption and exploitation are still running rampant and not just with small venue capitalists, but from the major institutions that have been bailed out several times by the American public. These banks and businesses were given slaps on the wrist instead of the full brunt of the law that the small person would have gotten had they engaged in such nefarious and underhanded business practices.
The American public is deep in debt and poverty. Greater than that of the Great Depression. It’s estimated that 42 plus million Americans are in poverty with close to 100 million no longer in the work force. These figures are abominable yet are skirted by the White House that likes to boast of improvements made since Obama took office. Obama has had to face the worst levels of blocking and stonewalling from the GOP and the fact that any headway has been made is nothing short of miraculous. The big money institutions are showing record revenue and gains, but aren’t reinvesting into the infrastructure of the country which they had pledged to do during the bailouts.
These corporations are getting away with murder and raising interest rates would have put more Americans into debt.but, raised the revenues of the lending institutions. Fractional Reserve Lending is what it’s called and has been a plague to humanity for thousands of years, aka loan sharking. It’s what our economies are based on in the US and even with irrefutable proof of its devastation, the practice is the bread and butter of Wall Street and the politicians who live off the lobbying money.
There may be a rate hike when the Fed meets in October or December. Everyone will be on pins and needles during this period. The holiday season will be a huge revenue surge and economists will look at how much consumer confidence comes from it. People tend to borrow more and spend more during these times and with or without a hike in interest rates, it will be a major turning point in US economics for this year and the coming election year.