There are two other things to consider. The first is that Fed policy can be assumed to be built into the markets. Prices in liquid markets are based on the best possible public information. Therefore, if I know about the pending change in the interest rates, that is public knowledge and will already be priced into the market rates. Any speculation I may have about interest rate changes is probably based on less information than what the market is already using, therefore my prediction has a lower likelihood of success; in case it is merely gambling to speculate.
The other consideration is that while changes in the interest rates may not impact the decision to purchase, they may impact the timing of the purchase. A house bought in 2006 when prices and rates were high would have been a much worse investment than the same house purchased in 2009 when prices and rates were low. Conversely, if expectations today are that rates will begin to rise in the next year or two then a major purchase now would be prudent; waiting could see the cost of that purchase increase significantly. In any case, the rate may impact the timing of the purchase but not likely the decision to purchase, unless the purchase was strictly as an investment with no other criteria attached.
4. In the current economy, rates are at the zero bound. However, the Fed still has the same tools in its arsenal for influencing interest rates. The Fed can increase rates if it believes that inflationary pressure is mounting. It has not done so because there is no evidence of inflationary pressure. The Fed cannot lower rates at this point, but that does not mean that it no longer has this tool, it means that it has used this tool. The Fed can also make statements with respect to its views of the state of the economy. If those views have concerns about inflation embedded, the market could take that as a sign of impending rate increases.
Addressing...
2010, September 18 Corporate Finance Corporate Finance The CDO market was largely attributed as being central to the sub-prime crisis. By first describing what CODs are and how they operate, identify and assess the failings in risk management practices used to manage the risks posed by these products by the banks involved. Risk assessment failure has been shown to be the primary causes of the sub-prime crisis in addition to a lack of
Greek Debt The European Commission on Wednesday adopted a series of recommendations to ensure that the budget deficit of Greece is brought below 3% of GDP by 2012, that the government timely implements a reform programme to restore the competitiveness of its economy and generally runs policies that take account of its long-term interest and the general interest of the euro area and of the European Union as a whole (Europa,
Branding in Service Markets Amp Aim And Objectives Themes for AMP Characteristics Composing Branding Concept Branding Evolution S-D Logic and Service Markets Branding Challenges in Service Markets Considerations for Effective Service Branding Categories and Themes Branding Theory Evolution S-D Logic and Service Markets Branding Challenges in Service Markets Considerations for Effective Service Branding Branding Concept Characteristics Characteristics Composing Branding Concept Sampling of Studies Reviewed Evolution of Branding Theory Evolution of Marketing Service-Brand-Relationship-Value Triangle Brand Identity, Position & Image Just as marketing increasingly influences most aspects of the consumer's lives, brands
Companies such as XYZ Widget Corporation are well situated to take advantage of burgeoning markets in developing nations, particularly in Asia and Africa. 2. XYZ can grow its business by expanding its operations to certain developing nations in ways that profit the company as well as the impoverished regions that are involved, particularly when marketing efforts are coordinated with nongovernmental organizations operating in the region. 3. Several constraints and challenges must
business2community.com/social-media/2012s-ten-worst-social-media-Disaster-0370309 Using contemporary illustrative examples from academic literature and reputable business publications, discuss the concept of "Social Business" and the resultant opportunity and challenges that are currently being faced by the retail industry globally. Concept of Social Business Concept of Social Business with Retailers Social Media and Retailing Best Practices in Administering Social Media There is a growing body of research that confirms that companies of all sizes and types can realize a wide array
Organizational Health Educational institutions generally approach organizational improvement by addressing the performance standards to which students, educators, and administrators are held. The standards movement has been a dominant theme in educational policy arenas and in the public eye. With roots in the 1950s Cold War mentality, the thrust of educational improvement has been prodded by perceptions of international industrial and scientific competition. If the rigor of educational standards in the nation
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now