Interest Rate Hikes, how soon and how high?

[william the wie]

Me, I am guessing that wage push inflation and real GDP growth combined will take the 10 year treasury interest rate from yesterday's 2.63% to something like 7.6% by election day and drop PEs by about 2/3s for dividend stocks while earnings and earnings growth go up. Any guesses on multiples for utilities?

 

[BuckToothMoron]

Me, I am guessing that wage push inflation and real GDP growth combined will take the 10 year treasury interest rate from yesterday's 2.63% to something like 7.6% by election day and drop PEs by about 2/3s for dividend stocks while earnings and earnings growth go up. Any guesses on multiples for utilities?

Wow, that is a bold prediction. Are you suggestion the 10 year will triple by Election Day 2018 or 2020? Either way, it would have devasting effects. Bond prices would clearly be crushed, dividend stocks (utilities) would get hammered, and what about the stocks of companies loaded with debt not to mention the interest on our national debt. Can you say Gold?

 

[william the wie]

Me, I am guessing that wage push inflation and real GDP growth combined will take the 10 year treasury interest rate from yesterday's 2.63% to something like 7.6% by election day and drop PEs by about 2/3s for dividend stocks while earnings and earnings growth go up. Any guesses on multiples for utilities?

Wow, that is a bold prediction. Are you suggestion the 10 year will triple by Election Day 2018 or 2020? Either way, it would have devasting effects. Bond prices would clearly be crushed, dividend stocks (utilities) would get hammered, and what about the stocks of companies loaded with debt not to mention the interest on our national debt. Can you say Gold?

Not very bold actually. Most blue wall housing went upside when the mortgage deduction cap went in to effect. 2-3T in equity losses are my guess leading to a burn baby burn spring and summer is certain but how big of a fire storm is not knowable.

 

[Toddsterpatriot]

Me, I am guessing that wage push inflation and real GDP growth combined will take the 10 year treasury interest rate from yesterday's 2.63% to something like 7.6% by election day and drop PEs by about 2/3s for dividend stocks while earnings and earnings growth go up. Any guesses on multiples for utilities?

Me, I am guessing that wage push inflation and real GDP growth combined will take the 10 year treasury interest rate from yesterday's 2.63% to something like 7.6% by election day

How many of these ETFs are you short?

 

[Toddsterpatriot]

Me, I am guessing that wage push inflation and real GDP growth combined will take the 10 year treasury interest rate from yesterday's 2.63% to something like 7.6% by election day and drop PEs by about 2/3s for dividend stocks while earnings and earnings growth go up. Any guesses on multiples for utilities?

Wow, that is a bold prediction. Are you suggestion the 10 year will triple by Election Day 2018 or 2020? Either way, it would have devasting effects. Bond prices would clearly be crushed, dividend stocks (utilities) would get hammered, and what about the stocks of companies loaded with debt not to mention the interest on our national debt. Can you say Gold?

Yeah, he's gonna be way off.

 

[BuckToothMoron]

Me, I am guessing that wage push inflation and real GDP growth combined will take the 10 year treasury interest rate from yesterday's 2.63% to something like 7.6% by election day and drop PEs by about 2/3s for dividend stocks while earnings and earnings growth go up. Any guesses on multiples for utilities?

Wow, that is a bold prediction. Are you suggestion the 10 year will triple by Election Day 2018 or 2020? Either way, it would have devasting effects. Bond prices would clearly be crushed, dividend stocks (utilities) would get hammered, and what about the stocks of companies loaded with debt not to mention the interest on our national debt. Can you say Gold?

Not very bold actually. Most blue wall housing went upside when the mortgage deduction cap went in to effect. 2-3T in equity losses are my guess leading to a burn baby burn spring and summer is certain but how big of a fire storm is not knowable.

Not very bold, are you kidding?. It’s been 25 years since we have seen those type of yields on the 10 year and you expect them them to get there in less than a year. Not sure what you consider bold.

 

[william the wie]

Me, I am guessing that wage push inflation and real GDP growth combined will take the 10 year treasury interest rate from yesterday's 2.63% to something like 7.6% by election day and drop PEs by about 2/3s for dividend stocks while earnings and earnings growth go up. Any guesses on multiples for utilities?

Wow, that is a bold prediction. Are you suggestion the 10 year will triple by Election Day 2018 or 2020? Either way, it would have devasting effects. Bond prices would clearly be crushed, dividend stocks (utilities) would get hammered, and what about the stocks of companies loaded with debt not to mention the interest on our national debt. Can you say Gold?

Not very bold actually. Most blue wall housing went upside when the mortgage deduction cap went in to effect. 2-3T in equity losses are my guess leading to a burn baby burn spring and summer is certain but how big of a fire storm is not knowable.

Not very bold, are you kidding?. It’s been 25 years since we have seen those type of yields on the 10 year and you expect them them to get there in less than a year. Not sure what you consider bold.

Trump's double digit growth plan pretty much meets my definition of bold. I was shocked when Schumer did not give in to Trump on immigration to get less of an internal migration gradient . How in the world did he know that the senate would be that stupid?

 

[Never3ndr]

Me, I am guessing that wage push inflation and real GDP growth combined will take the 10 year treasury interest rate from yesterday's 2.63% to something like 7.6% by election day and drop PEs by about 2/3s for dividend stocks while earnings and earnings growth go up. Any guesses on multiples for utilities?

Unless something totally abnormal happens, there is actually no chance of that happening given the current state of our economy. Remember that most economists are actually estimating for our neutral rate to be much lower than it has been historically. There are also starting to be some economist sentiment on allowing for inflation to rise above the 2% target for a period of time for various reasons. Finally, the Fed's balance sheet normalization is going to naturally relieve some of the downward pressure on long-term rates, steepening the yield curve.

I think that most analysts are predicting 3 to 4 rate hikes (so .75% to 1% on the Fed Funds Rate). I'm in the 4 rate hike camp. That would put fed funds at around 2.25% to 2.5%, and probably have 10 years somewhere around 4%-ish if I had to guess. With that said, it is all a guess anyways...but, again, no way it bumps up to 7.6%.

 

[MarathonMike]

Me, I am guessing that wage push inflation and real GDP growth combined will take the 10 year treasury interest rate from yesterday's 2.63% to something like 7.6% by election day and drop PEs by about 2/3s for dividend stocks while earnings and earnings growth go up. Any guesses on multiples for utilities?

You really believe we are looking at over 7% on 10 year Treasuries by November? Even a move to 4% would be very significant by November. A move to over 7% would derail the markets big time and all the folks with their hands on the levers don't want that to happen.

 

[percysunshine]

The ammended Federal Reserve act of 1977 has the Fed both promoting high employment and low inflation....which are contradictory. It also lets them do what they want to do with banking interest rates.

 

[william the wie]

The ammended Federal Reserve act of 1977 has the Fed both promoting high employment and low inflation....which are contradictory. It also lets them do what they want to do with banking interest rates.

The lag between real investment and the reduction in regulations means that a 2-5 year lag until real GDP growthrates and employment permit wage push inflation to decline.

 

[Pavel Svinchnik]

Me, I am guessing that wage push inflation and real GDP growth combined will take the 10 year treasury interest rate from yesterday's 2.63% to something like 7.6% by election day and drop PEs by about 2/3s for dividend stocks while earnings and earnings growth go up. Any guesses on multiples for utilities?

I am currently keeping my spare cash in 4-week T-bills. I invest 1/4 each week and reinvest when it matures. That way, I can keep up with the expected interest rate hikes as they occur. True, they only pay about 1.3% at the moment, about half of the 10-year Treasuries, but I consider that difference the cost of keeping my funds relatively fluid. If the market dips, I can move the funds into stocks as the bills mature each week.

 

[Moonglow]

Me, I am guessing that wage push inflation and real GDP growth combined will take the 10 year treasury interest rate from yesterday's 2.63% to something like 7.6% by election day and drop PEs by about 2/3s for dividend stocks while earnings and earnings growth go up. Any guesses on multiples for utilities?

Wow, that is a bold prediction. Are you suggestion the 10 year will triple by Election Day 2018 or 2020? Either way, it would have devasting effects. Bond prices would clearly be crushed, dividend stocks (utilities) would get hammered, and what about the stocks of companies loaded with debt not to mention the interest on our national debt. Can you say Gold?

That is why I keep suggesting to watch out for bond sell offs...

 

[Moonglow]

I double my money monthly by buying weed in Colorado and selling it in Missouri and Arkanass....

 

[Zander]

Excluding a major black swan event.....

I expect Federal Funds rate to rise 75 basis points higher in 2018- to at least 2%.
I expect 10 Yr Treasury rate will rise to somewhere in the 3.25-3.75% range.

 

[william the wie]

Excluding a major black swan event.....

I expect Federal Funds rate to rise 75 basis points higher in 2018- to at least 2%.
I expect 10 Yr Treasury rate will rise to somewhere in the 3.25-3.75% range.

Excluding a major black swan event.....

I expect Federal Funds rate to rise 75 basis points higher in 2018- to at least 2%.
I expect 10 Yr Treasury rate will rise to somewhere in the 3.25-3.75% range.

I mostly agree about what the Fed should do but given the migration gradient that comes with the tax bill I expect the Fed to polarize and panic. Cuomo and Brown are jousting with settled law when it comes to SALT and will send muni-rates into double digits for a time and in at least some states. As economists in a legal battle they will do the wrong thing at the wrong time.

 

[william the wie]

Me, I am guessing that wage push inflation and real GDP growth combined will take the 10 year treasury interest rate from yesterday's 2.63% to something like 7.6% by election day and drop PEs by about 2/3s for dividend stocks while earnings and earnings growth go up. Any guesses on multiples for utilities?

I am currently keeping my spare cash in 4-week T-bills. I invest 1/4 each week and reinvest when it matures. That way, I can keep up with the expected interest rate hikes as they occur. True, they only pay about 1.3% at the moment, about half of the 10-year Treasuries, but I consider that difference the cost of keeping my funds relatively fluid. If the market dips, I can move the funds into stocks as the bills mature each week.

Not having a crystal ball I don't know the answer. But if Trump gets merit based immigration and FDI (Foreign Direct Investment) going both double digit GDP and Detroit/Trinton creations will both be seen just like in Japan and China, whose models Trump has high jeacked.

 

[william the wie]

I thought it was time to revisit this thread.

Declines into gibbering idiocy over a so far less than 2% drop

Left coast housing is going up in price despite mortgage deduction cap.

The Manhattan real estate drop is very slowly spreading and deepening.

The manmade fire season has yet to begin.

In the low SALT/low cost of living states the construction and remodeling boom is running up against the labor shortage and wages are increasing markedly. Steel frame housing and business sites are going great guns because of the shortage of competent Carpenters and masons.

Wage push inflation is getting higher in the red edge so even higher interest rates are needed to reduce inflation in the areas where most of the citizens of this country live. So what is needed is about a 5% CD rate, which is real popular with retirees.