The Ups and Downs of a rising economy!!

The US economy is finally making a strong comeback, but are there big changes in our future?

The US dollar index (DXY) is the highest it has been in seven months, with a high of 99.345. Last time we saw it this high was back in mid-April at 99.187.The dollar rose 123.36 in yen! This is up 1.21 percent from the previous high in August.

What goes up must come down. Thanks to the jump for the dollar, we have seen a gradual decrease in the oil prices, and short-term bond yield rose to the highest in five years on Friday. The unemployment rate is also seeing a low of only 5%. This is the lowest it has been since April of 2008. This is in range for what the Federal Reserve considers “full employment.”There was an increase of over 270,000 non-agricultural jobs in October. The US dollar is not the only thing rising quickly. The hourly wage also rose a fair 9 cents. Some US states have even imposed a sliding system, almost doubling the current minimum wage in only a few years. Missouri and a few other Midwest states have already started raising minimum wages more than 9 cents.

With all this good, there has to be a little bad. There are reports that the Federal Reserve will be raising interest rates before January, 2016. Again, these are just rumors. However, if they do decide to go through with the raise, this will be the first time in almost a decade that interest rates have been raised. Kevin Giddis, head of fixed income capital markets at Raymond James, said, “There’s a pretty strong feeling that the Federal Reserve is going to hike rates a quarter of a point in December.” Will this increase be beneficial to the US, or will it further hinder small business and the American economy? After all, this will put an end to years of easy monetary policy. Kathy Lien, managing director at BK Asset Management said: “You’re going to see a renewed appetite for the US dollars.”

This sounds too good to be true. We might just catch the Euro, which fell to its lowest since April, down 1.48% the dollar against the Euro is $1.708 EUR. All I know is the US has to do something to push this economy where it needs to be. Most people are still feeling the effects of the recession. I don’t really think change is always a bad thing. If we increase the interest rates, we might be able to pay off some debt of our own and get back to when gas was affordable and our paychecks made sense.

McMillan said, “The economy is now strong enough to take a slowdown and to continue to move forward strongly.” He added, “And that’s actually very encouraging for the next 12 to 18 months or so because it says we got some very strong momentum here.”

We are still awaiting the official word from the Federal Reserve. Hopefully, next month the weather isn’t the only major change. We will be patiently waiting for that “renewed appetite” for the US dollars. I will be eagerly awaiting their decision.