Fed Symposium Preview: Jackson Hole to Fuel Market Volatility? This is a question I get asked by many of my friends and clients. The Federal Reserve has its own view on the matter and their views may differ from the views expressed here.
I do believe that the Federal Reserve will eventually take a hard stance when it comes to interest rates and the economy. However, with interest rates already at historic lows, and the U.S. economy in the midst of recovery from the Great Recession, there’s no need to raise interest rates until the economy starts to pick up momentum again and unemployment and inflation become a real risk to the American economy.
One thing that most of the Federal Reserve speakers and analysts seem to agree on is that the central bank should take a wait and see approach on raising interest rates. Many believe that the current ultra low interest rates are going to continue into 2020.
One of the biggest fears for most people who’ve been following this story is the idea of rate hikes. There’s a lot of controversy about this. In fact, many people are not sure that the Federal Reserve will be able to bring rates down even lower than they currently stand. But the problem that I have with that argument is that interest rates have been at record lows and if you look at the history of economic cycles, the Fed has always been able to get them back up in a short period of time.
The truth of the matter is that the Federal Reserve doesn’t want to see rates go any lower than they are currently and one of the reasons they keep raising them is because they believe that the economy is on the rebound. If they were to suddenly cut rates, you could see an enormous correction in the markets in just as short as five minutes and then the markets would fall again.
Another argument that’s frequently made by some folks is that the Fed has done nothing to help the economy. However, this is actually not true. Even though we’ve had record job creation over the last several months, it’s important to remember that the economy needs some help from the government as well. The government has been helping the economy with stimulus plan that’s been put in place for many months now.
However, I would question whether or not the hawks really understand what’s going on. When you think about it, this whole thing has a lot more to do with the future of the American economy and the overall direction it will take. If the Federal Reserve continues to hike interest rates, this could set off a housing and real estate bubble and cause the housing bubble to burst.
Of course the markets will also react negatively as the market goes through the roof, but you can expect the Federal Reserve to be watching closely and hopefully see this coming. In other words, the markets are looking for the Fed to hold their ground.
When you consider the overall state of the real estate market, one thing that stands out quite a bit is the number of foreclosures that are happening. The number of foreclosure sales has dramatically dropped since the housing bubble popped. This means that there is a lot less property for potential buyers to purchase.
As a result of this market correction, the market is going to continue to go up until the housing bubble bursts and hopefully the Federal Reserve will be able to prevent this from happening. so it will be very interesting to watch this economy and how things move forward.
Also, I would like to see some more discussion about the real estate market in the city of Jacksonville itself. It seems that home prices in Jacksonville have been increasing, but as more buyers become concerned about the housing crash and the decline in the housing market, they’re looking to buy elsewhere.
There are probably a lot of questions that haven’t been asked and questions that need to be answered when it comes to the future of the real estate market in Jacksonville. It’s important for the public to ask some questions that will allow them to better understand the current situation and how things will affect them in the future.