The Federal Reserve will make its monetary policy statement and announce the official rate on December 19, at 21:00 MT time.
US consumer debt surge can't outpace wages forever
American consumers are currently taking out debt at a far faster rate than their real incomes or the US economy is surging, and America might be hitting a fresh high in employment.
US consumers have run up more than $1 trillion on credit cards, reaching a level not observed since January 2009 and up 6.2% from the previous year. By the way, wages are up less than 3% and the American economy is surging just under 2% a year.
Student as well as car loans are also at $1-trillion-plus levels and also surging twice as fast as wages or the US economy.
The overall percentage of disposable income the average household requires to service debt is approximately 10%, close to all-time minimums. The same applies to interest rates. By the way, when interest rates change at extremely low levels, small increases in absolute terms imply huge increases in proportional ones.
Fed tightening, and also both balance sheet as well as interest rate variety will just serve for the purpose of straining liquidity conditions and raising debt service costs.
Find out the main market movers for today and the reasons behind the risk-off sentiment!
November’s euro zone consumer price inflation was suddenly updated downwards on Monday, thus contributing to skepticism that the EU’s key financial institution won’t be able to move ahead with an interest rate lift next year…
Safe havens such as gold and Japanese yen declined as investors sentiment was boosted by eased geopolitical tensions…
On Tuesday, the euro tacked on because market participants waited for reports on inflation and growth in the euro zone, while the Japanese yen went down after Japan’s major bank told it would be more flexible in its huge stimulus program…
On Tuesday, the evergreen buck dived because the common currency bounced off and the UK pound managed to ascend to the day’s maximums reacting to reports that British Prime Minister Theresa May is going to take control of Brexit talks…