After almost seven years, the beginning of the end of ultralow rates is here. Today it's hard to imagine anyone left who doesn't understand a rate increase is coming, most likely sooner (2015) rather than later (2016).
On balance, the data remain far stronger than anyone in the midst of the financial crisis would have imagined at this point. And many key economic indicators are stronger than the Fed had earlier suggested would be the threshold for ending its zero-interest-rate policy.
You can parse each utterance of every Fed governor, or you can look at the data. I prefer the latter -- and it tells me interest-rate normalization will start before Christmas.
I disagreed and wrote a post, "Why on earth is the Fed thinking about raising interest rates?"
Today Mr. Ritholtz writes "This Recovery Really Is Different":
By just about every economic metric, this has been a mediocre, subpar recovery. For the first few years following the end of the recession in June 2009, employment increased slowly. Wages to this day have been little changed. Retail sales have been inconsistent; housing has seen soft sales numbers, while price increases have been a function of a lack of inventory caused by limited amounts of home equity and immobility as a consumer try to reduce debt. Gross domestic product growth has been weak and lacking in consistency.
So how does that justify a rate hike? Or did Mr. Ritholtz change his mind over the weekend?
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