New Federal Reserve Interest Hike Will Not Improve Its Credibility

A lot of people have been keeping their eye on the Federal Reserve. Later this week, the US central bank will decide whether or not further interest hikes are scheduled for 2016. Not too long ago, it seemed unlikely this would happen, but the situation has changed again. It is possible a new rate hike will be possible near the end of 2016, as the US economy is showing signs of improvement in their opinion.

Can The Fed Warrant A New Rate Hike For 2016?

That seems to be the question on most people’s minds right now. Investors are not too bothered with whatever the Fed may decide to do, as they are already looking at other opportunities to make money. Even if a new rate hike were introduced at the end of 2016, it would not restore confidence in the central bank by any means.

Granted, the year 2016 has not been kind on the Federal Reserve by any means. Their credibility – or whatever is left of it, anyway – has been stretched very thin. For now, the general approach by investors seems to be “we will believe it when we see it”, which does not bode all that well for the US economy.

The biggest concern comes in the form of how the markets seemingly no longer care about whatever the Fed may have to say at this stage. Although an interest hike is positive news for consumers and enterprises, it will not necessarily alleviate any of the financial strains on the US economy anytime soon.




To put this into perspective, less than one in five investors gives any credibility to these interest hike claims at this stage. Most people believe there will no increase, and it is doubtful there will be one at any given stage this year. The stock markets and bond markets are still on the fence between declining further, or showing signs of stabilization.

In the end, investors will continue to look for opportunities that will give them a chance of making a profit in the long run. Unfortunately for the Federal Reserve, they will not be able to influence those decisions for much longer. Bitcoin, precious metals, and anything that is not controlled by banks, are all great picks right now.

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