I don’t believe they will raise rates. I think it will be an economy killer. I believe the only took they have left is to THREATEN to raise rates, trying to cause people And companies to borrow and consume and, in essence, get in before the 8spending rate hike. The thing is, if they don’t do it this time they will look like the boy who cried wolf. I.e. they can only do it once.
This month my theory will be tested. But if I’m right, the veil will be lifted on how the economy is REALLY doing.
Took = tool
I don't think they really want to, but they have painted themselves into a corner at this point. This Friday's non-farm payroll figures will be key. Any sign of weakness may give the Fed some pause and enough of a plausible excuse not to raise rates at the December 16th meeting.
Coming off of last month's 'blockbuster' numbers of +270k (mostly due to holiday hiring), I would expect a slight downward revision. If there is no downward revision and a payroll number in the 225-250k range, they may have to bite the bullet and raise 25bps. If they do raise this time around, it will be a token gesture and we probably won't see another hike for more than a year.
If there is a downward revision from last month's payroll numbers and weaker than expected payroll number this time around, the Fed will be able to punt yet again.
Please note that I take all of the government data with a heaping tablespoon of salt so to speak.