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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

U.S. Interest Rates - How the Federal Reserve Has Completely Fooled Us for Years

Interest-Rates / US Interest Rates Apr 07, 2015 - 12:47 PM GMT

By: DailyWealth

Interest-Rates

Dr. Steve Sjuggerud writes: We must be idiots...

The Federal Reserve has completely fooled us for more than six years...

"Higher interest rates are just around the corner," they tell us today.

The thing is, they've told us that over and over – since the Fed first cut interest rates to zero back in 2008.


The Fed has cried wolf, for more than six years. And we're still panicking, looking for the wolf...

To show you what I mean, we've put together a simple table. This table shows the market's expectations of how long it will take for the Federal Reserve to raise interest rates. The message from this table is, an interest rate hike is always "just around the corner":


Earlier this year, it was nearly unanimous – the Fed was going to raise interest rates in June 2015. Then it slowly shifted... the consensus opinion was that the Fed would raise rates in September 2015.

Now, according to a Bloomberg article last week, "Traders Are Now Expecting the Fed to Raise Rates Later Than Ever Before."

The subhead says, "Market expectations are for no rate increases from the Federal Reserve before the last week of November."

I suggest you ignore the Fed. I suggest you stick with my investing "script" – which my subscribers have been following for at least five years:

"The Fed will keep interest rates lower than you can imagine, for longer than you can imagine, and that will cause asset prices – including stocks and real estate – to soar higher than you can imagine."

If you had stuck with that script and listened to nothing else, you'd be very wealthy today.

Has the script changed?

No.

If you listened to the Fed – if you worried that higher interest rates are just around the corner – then you might have panicked at some point and sold.

Don't listen to the Fed. The Fed has cried wolf for more than six years. There is no wolf.

Instead, stick to our script. It has served us well for years.

It has made us a lot of money. And it will continue to do so... as I believe that stocks and real estate have not soared higher than you can imagine yet...

Good investing,

Steve

Editor's note: If you'd like more insight and actionable advice from Dr. Steve Sjuggerud, consider a free subscription to DailyWealth. Sign up for DailyWealth here and receive a report on the five must-read books on investing. This report will show you several of the DailyWealth team's "must read" books, which will help you become a better investor right away. Click here to learn more.

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2013 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

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