Current Interest Rates: Unanimous Expectations
By Bryan Bottarelli
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The Fed will hold rates steady at 5.25% for the seventh straight meeting.
Economists are sharply divided on what to do with rates on the long-term.
Most likely, nothing will be decided until August.
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Although the Fed doesn’t officially announce their decision on interest rates until tomorrow, the verdict is almost unanimous that the Fed will hold rates steady at 5.25% for the seventh straight meeting.
The biggest question pertaining to interest rates will be whether or not consumer spending is hit negatively by high gas prices.
But as of today, there is no conclusive data to make any conclusions – which will result in rates that remain unchanged at 5.25%.
Now, if you must debate something, here’s where you can flex your muscle. You see, the real Fed debate surrounds on whether or not the next move will be an increase or a decrease. For the first time in a long time, economists are sharply divided on the topic.
Current Interest Rates: Economists are Divided
On one side of the coin is Bank of Hawaii economist Paul Brewbaker, who feels that the Fed will gradually lower rates to 4.25% by January.
On the flipside of that coin is RBS Greenwich Capital – who feels that accelerating growth and high inflation will lead to a tightening cycle.
Each side of the fence makes a strong argument – and without any conclusive data to draw from – I suspect that the debate will rage on into June and July.
After all, most economists agree that nothing will be decided before August. So in the meantime, expect to see a high degree of statement analyzing tomorrow.
But not much of anything else.
Current Interest Rates: WOW Plays Move Regardless of Fed Decisions
In the meantime, a small group of technology stocks continue to receive high marks from our WaveStrength Power Ratings study. Just today, for example, WOW play Hewlett-Packard (HPQ – NYSE) lifted its financial forecast for the second quarter – pushing the stock to a new 52-week high of $44.97. And on the heels of this up-move, Adam has uncovered another winning upside chart forecast that’ll be issued as our latest WOW play this evening.
According to the WOW charts, this stock is forecasted to move all the way up to its 2006 high of $53.00, good for a very strong $8.72 advance over the next 8-12 weeks. The alert we’re issuing after the close of trading will allow you to participate in the entire upside move – possibly making a 136% gain over the next 8 weeks.
WOW members – expect to see your latest recommendation later this evening.
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Bryan Bottarelli is the head trading tactician for the WaveStrength Group, and is a contributing editor for Taipan Financial News. Coming off the floor of the Chicago Board Options Exchange (CBOE), Bryan uses WaveStrength chart forecasting to develop wining options plays for his service called WaveStrength Options Weekly. Bryan is also the lead editor of BottarelliResearch, an elite membership service that he independently publishes himself.
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