A Fed's rate Hike

By

Sampson Iroabuchi Onwuka

 

The 2017 U.S tax reforms, 2017 Health Care legislative, 2018 medicare, has been described by experts as major drive-in for a possible raise of Fed’s Funds rate this December. There is a possible third reason, that the hike is inevitable given the decline lines for fortune 500 alternative energy consortium (companies) many of which benefited from Obama’s activity with energy other than crude oil.

Fund rates in U.S usually impact inflation, to a point that it is inversely correlated to core consumption index, especially crude oil. But since 2015 when the Federal Reserve started to raise rates again, at least this December is the 6th consecutive rake hike, there seem no real correlation between crude oil which has average out, inflation which has bottomed out to Funds rate.

How alternative energy will respond to a kind of oversight is a question that the three proposed Federal Reserve hike for 2018 will likely answer. We are left with the scenario to whether or not the high energy consumption of U.S at such low price – both for automobiles and household management ever revert to speculation with energy. In essence, will the Fed hold their guns if crude oil price roil from lack of details to alternative energy?

How does the third world react to a hike - even at the most ordinary measured pace? Most third world markets may not seem to feel the gradual domination of rate increase, for that a shift in precious metals is because of bitcoin, a shift from alternative energy may represent a challenge that the new administration may follow. A U.S rate increase to third world markets, International markets, global macro, is a shift to more U.S money currency abroad – it signals the beginning of financial migration from U.S market to oversea, and U.S bond exiting to Junk bonds, the beginning of a call.

Forex in the next returning year is everybody’s business, where everyday traders will likely be, which usually means exiting balance sheet CPI, to a shelf from anti-CPI core; housing for instance where Oil rich Nigerians can shift to as they gather storm for a rumble. Crude oil begins its uptake to roil by shedding (falling) – a few weeks in this December 2017 is the last great chance for an oil rich third world to bifurcate and ordinary traders enter since from hereon and from experience the way forward for crude oil is essentially north-wards.

The question that remains to be answered is the extent labor statistics under Janet Yellen, has lived up to employment numbers. Low inflation as they argue does not encourage employment, it encourages a shed in unemployment (?), perhaps cheap labor from International exchange a point to consider that new administration in U.S, with its appoint of Jerome Powell to replace Yellen, is adverse to cross border programs that create additional demand for cheap labor.

In economics if not in science, the problem of labor and employment has not been fully explained, for how could labor differ from employment, and how does the statistics on unemployment differ from employment. If healthy credit over employment is the motivation for rate hike, it is to homage new facility for inflation which cannot fail with energy.