Saturday, December 08, 2012

Time to raise interest rates

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Sounds crazy doesn't it?

But, with the recent strengthening of the economy, including true job growth finally, and the need for dollar strengthening, I would firmly propose that the Fed get ahead of the inflation curve now and begin raising rates slowly. 

  • This will signal to the world that the economy of the most important economy in the world is on the rise
  • This will firmly restrict inflation looking forward
  • This will begin to reduce the pressure on the dollar and let it move to free floating
Feel free to disagree, or get all upset about the role of the Fed, but real estate is beginning to recover and rates are too low actually right now.   It's time for rates to begin their natural tendency back toward 6% on 30 year mortgages.

What say you?