“Federal Reserve Finance” is planning to increase the interest rate after report of good prospering jobs. So the signs of trading are a bit low due to this expectation. This year the Federal Reserve is planning to increase the Interest rate this September due to healthier United States Economy. Banks are proposing that Federal Reserve will be increasing the Interest Rate this September and there will be another rate before the year ends.
Apart from that, Banks are also expecting the Interest Rate hike will be steeper and their timing. Is it the correct time “Federal Reserve Finance” is taking this crucial decision? How will it affect the Global Economy? Does Barack Obama require United States Dollar to be lean?
Dow Jones Industrial Average was down; same is with S & P index and Nasdaq Composite. Energy Index is the leading looser due to slide of China’s Oil import and OPEC is planning to keep the increased production .
The S & P Index showed 5 lows and 7 highs whereas NASDAQ recorded 12 new lows and 81 highs. The first phase of growth in United State Economy is already over, but rooms of development are there. After March 2009, Dow Jones Industrial Average has increased to 165%, Nasdaq Up by 260%, New York Stock Exchange increased by 165% and S & U P 500 has climbed over 200% respectively, Unemployment decreased by 6.1% and inflation is right now in check.
Due to Low Interest Rate, High Income Groups are taking loans from the Banks, Financial Institutions, etc and are they pumping these into Share Market for gaining more profit. Still One-Sixth of the population are receiving food stamps that means people below the basic poverty line is increasing [46.23 Million] IMF is expecting the United States Economy will be growing by 3% this year, better than 2.8% in 2014.The Economy is still in a pathetic position, Wages had declined after the recession, that means people are getting less value of money than before. Home Price Index is still down; need another 25% to reach the level at the time of recession 2009. New home purchasers are less than the average purchases done during the time of recession.
High Interest rates means Banks can charge more and earn good profit. If Barack Obama is going to increase Interest Rate means the United States Government is working to increase profit for Banks, Financial Institutions, Other Non-Banking Finance Institutions, etc. JP Morgan Chase has increased the profit to 350%, 450% increase can be seen for Morgan Stanley, 500% increase in profit can be seen in Bank of America Corporation and 625% increase in profit share for Wells Fargo & Company shows Banks are gaining profit from stock growth.
IF that is the situation, United States Economy still needs time to conquer growth. Some policies reforms must be implemented from Government side for Middle Class and Low Class Americans. Creating Jobs for people is a best bet for Barack Obama. If we look at the World Side, China is still staggering to move forward. India is held-back due to reforms taking place. Brazil is down and Russia is messed-up politically. So my dear investors, United States Market is not going to have Interest Rate hike this September, maybe they will increase in December 2015. Wait and watch “Federal Reserve Finance” dude.