3 Interest Rate Hikes for 2017?

The Federal Reserve made the last interest rate hike for 2016 in December. At the end of the year they hinted that there would be more to come in the coming year, but experts disagree with their hint.

The executive vice president of capital markets of New American Funding, Jason Obradovich, says they won’t be raising rates like they are hoping to.

He says they have tried raising rates for the past few years and only did it successfully once per year, not to mention in the 11th hour (December) of the year. That is the definition of waiting until the very last second to pull the trigger.

One thing is for sure, the interest rate rose for nine consecutive weeks once Donald Trump was elected President. This was some of the most active movement the market has seen in a substantial while considering they hit two-year highs.

However, on the other side the past two weeks have seen rates drop. The hype of the election is what made the rates rise. Every economist knows constant rate hikes would be too much for the economy to withstand over time. The Fed tried hinting this would be the new trend, but the market wasn’t fooled.

Obradovich also thinks the American people could see a tax cut, which has the potential to raise rates and inflation. He doesn’t think there’s any room vertical room left for the rates to go, as the market simply cannot support high rates.

There’s always somebody to argue for the opposite side, and that would be CEO of OwnAmerican Greg Rand. Rand believes the economy is as strong as ever and we have nothing to fear. His argument is that Janet Yellen, the Federal Reserve Chair, is responsible for seeing the dollar reach a 14-year high, saying there is plenty to be confident about in the US economy.

Now is a time to play it conservatively and assume the economy isn’t quite ready to withstand numerous rate hikes this year. It’s better to be absolutely, 100% sure, than risk it on behalf of the American people. 

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