No Rate Hike Before Elections

At 2 pm today, the Federal Reserve will come out with their statement on economic projections and Chairwoman Janet Yellen will hold a press conference. Investors are keenly waiting for FED’s signal on the rate hike and borrowing costs for the near to long term. Janet Yellen will come out and speak for “hike”, but they will not raise the rates now because of the proximity to the election. Any rate hike now will only lead to pricking the stock market bubble, and that will look bad. Nobody wants to see a repeat of 2008 pre-election months. So that puts the hike off the table at least till 2017. Who knows if she will continue as the chairwoman after the election. But the reality is that the rates have to be higher. Prepare yourself.

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