Understanding The Rational Board Of Governors Decision - FRB

by C. Henry Adams

On Wednesday, December 16th 2015, the Board of Governors of the Federal Reserve System, better known as, the Federal Reserve Bank ("FRB") raise the interest rate in the United States Banking System. 

Since the US Dollar is one of the four major currency (U.S. dollar, euro, Japanese yen, and pound sterling) on Earth; up until the Chinese Renminbi (RMB) becomes the fifth currency, effective October 1, 2016 .   The FRB decision will likely have an effect in the World Market.

Basically, this means the Governors of the Federal Reserve System saw the following things in the USA:

1) People and Business(es) appear to be spending money in recent months.
2) People appear to be renting, leasing or buying homes.
3) People appear to be getting employed in recent months.
4) Energy prices, such as gasoline to drive vehicles appear in decline.
5) Measurements regarding the US Market are down.

I can hear someone say, " C. Henry, how do you know that to be true?"  My Reply:  I read it in the 'News Release'  here:  http://www.federalreserve.gov/newsevents/press/monetary/20151216a.htm

 Nevertheless, to follow the Governors of the Federal Reserve System's double or dual mandate (objectives).  They decided to help increase employment and keep prices stable in the US Marketplace.

They anticipate that inflation will rise about 2 percent as energy cost decline.  Perhaps this will cause employment to increase.  

Basically,  the Governors of the Federal Reserve System monitors the economy closely and made a judgement on their findings. Plus, they have set a goal for inflation and will act upon it accordingly.

Perhaps owning US Treasury Bonds are a good thing these days; those are my thoughts.

So, what say you?  Thanks for reading, I greatly appreciate you.

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