Pulse Price Report: Interest Rate Hike Coming ‘Relatively Soon’
Federal Reserve Chair Janet Yellen told Congress’ Joint Economic Committee that an interest rate hike, “could well become appropriate relatively soon.” The hike would be the first since last December and only the second in a decade.
The Federal Reserve (Fed) intended to do up to four interest rate hikes through 2016, but was derailed by market volatility with the Brexit vote and presidential election. President-elect Donald Trump has accused the Fed of holding interest rates low to make President Obama’s final months in office look good. Now, Yellen’s language indicates that an interest rate hike is inevitable, speaking more of the dangers in holding off for too long.
If interest rates are held too low for too long, the economy can inflate as more people take out loans at those low rates. If things get carried away, the Fed would be forced to spike interest rates quickly, throwing a cold blanket on a hot fire.
Yellen said Trump’s win did not affect the Fed’s decision, but rather the ever-strengthening American economy.
Unemployment insurance claims fell to their lowest since 1973 and the housing market is at its strongest since before the 2008 recession.
Yet Trump’s plans are important for the Fed to consider. His goal of reducing taxes and increasing spending on infrastructure may heat the economy up more than the Fed would like. Although poised for two interest rate hikes in 2017, that could change once the new president’s plan begins falling into place.
Crop prices (Nov. 21)
Rio Creek Feed Mill – Algoma
|Commodity||Price (per bushel)||Basis|
|New-Crop Wheat (SRW)||$3.74||-0.80|
Fox River Valley Ethanol – Green Bay
Basis: The difference between the local cash price for a commodity and the Chicago cash price (where the Board of Trade sets national futures price).
Gas Price Averages
United States: $2.14
United States one year ago: $2.09
Wisconsin one year ago: $2.07
Northern Door: $2.14
Sturgeon Bay: $2.03
Gold: $1,214.70/troy ounce
Silver: $16.67/troy ounce
Sources: aaa.com, agweb.com, gasbuddy.com, money.cnn.com, Wall Street Journal, Bloomberg