Today (September 21st, 2016) The Federal Reserve announced their decision not to raise interest rates this month but stated that an interest rate rise would most likely happen by the end of 2016. Prior to today's announcement, there was much speculation on if an interest rate rise actually would or would not occur. Many analyst held a 50% chance of an interest rate rise occurring but as the days continued closer to today's announcement many of the same analyst lowered their belief that an interest rate rise would occur down to only 15%.
Now the question is why? Why did analyst lower their opinion by 35%? It is simple - as Dr. Bart DiLiddo stated in one of his latest news-letters to the subscribers of his Vector Vest service - Janet Yellen did not want not take the risk of messing up an election year by raising interest rates and possibly causing markets to tank before a presidential election. This is why Janet Yellen keeps on hinting on a rate increase that would take place sometime towards the end of 2016 i.e. December which would be post the presidential election in November 2016. Janet Yellen probably did not want a repeat of last year’s result when the Federal Reserve slightly raised rates in December 2015 and markets fell, especially prior to an presidential election.
(I am not endorsed nor a subscriber of Vector Vest but I did previously subscribe to the service and I do still receive informational emails from Vector Vest.)
Thank you for reading!
Until next time,
- Ford Mogul