Graham Stephan: Interest rates will rise

Said on Feb 6, 2019, at 1:16 in the video.

What was said
Graham Stephan

@grahamstephan

“the cost of borrowing money is expected to get more expensive over the next few years”
Watch at 1:16How To Prepare For The 2020 Recession
PredictionInterest rateswill riseChecked at fixed windows, from 30 days to 5 years
What happenedafter 1 year
Incorrect

Reading when said

2.5%

Feb 6, 2019

Reading at close

1.75%

Feb 6, 2020

Change

−0.75 pp

The policy rate was 2.50% at the start of the window and 1.75% on Feb 6, 2020, a net change of −0.75 pp. The largest increase inside the window was 0 basis points. The stated threshold was 25 basis points.

30 days

Incorrect

90 days

Incorrect

180 days

Incorrect

1 year

Incorrect

The window it was checked over

Interest ratesWindow checkedRecession (NBER)
0%0.5%1%1.5%2%2.5%3%201620162017201820192020Said on Feb 6, 2019
0%1%2%3%2016201720182020Said on Feb 6, 2019

Federal funds target range, upper limit: Federal Reserve Board via FRED, figures as first published. The shaded span is the window the call was checked over; grey bands are recessions.

Result at every window

All windows are shown, so none is picked
Result at every window
WindowResultAt the startAt the endChangeBenchmark
30 daysR-FED v4Incorrect2.5%2.5%Mar 8, 20190.00 pp—
90 daysR-FED v4Incorrect2.5%2.5%May 7, 20190.00 pp—
180 daysR-FED v4Incorrect2.5%2.25%Aug 5, 2019−0.25 pp—
1 yearR-FED v4Incorrect2.5%1.75%Feb 6, 2020−0.75 pp—
3 yearsR-FED v4Incorrect2.5%0.25%Feb 5, 2022−2.25 pp—
5 yearsR-FED v4Correct2.5%5.5%Feb 5, 2024+3.00 pp—
Why: 30 days

The policy rate was 2.50% at the start of the window and 2.50% on Mar 8, 2019, a net change of 0.00 pp. The largest increase inside the window was 0 basis points. The stated threshold was 25 basis points.

Why: 90 days

The policy rate was 2.50% at the start of the window and 2.50% on May 7, 2019, a net change of 0.00 pp. The largest increase inside the window was 0 basis points. The stated threshold was 25 basis points.

Why: 180 days

The policy rate was 2.50% at the start of the window and 2.25% on Aug 5, 2019, a net change of −0.25 pp. The largest increase inside the window was 0 basis points. The stated threshold was 25 basis points.

Why: 1 year

The policy rate was 2.50% at the start of the window and 1.75% on Feb 6, 2020, a net change of −0.75 pp. The largest increase inside the window was 0 basis points. The stated threshold was 25 basis points.

Why: 3 years

The policy rate was 2.50% at the start of the window and 0.25% on Feb 5, 2022, a net change of −2.25 pp. The largest increase inside the window was 0 basis points. The stated threshold was 25 basis points.

Why: 5 years

The policy rate was 2.50% at the start of the window and 5.50% on Feb 5, 2024, a net change of +3.00 pp. The largest increase inside the window was 300 basis points. The stated threshold was 25 basis points.

What was said around it

out there all talking about an upcoming recession each with their own prediction of when that's going to be taking place so let's first talk about exactly what's causing this then let's talk about exactly what I think is realistically going to happen and finally let's talk about how you could best prepare for the upcoming recession with the best chance of coming out ahead and making a profit so let's first talk about what's influencing the markets and which factors we should really be made aware of the first one is rising interest rates this means that the cost of borrowing money is expected to get more expensive over the next few years now when borrowing money is more expensive you either need to raise prices to keep profit margins the same which means that things get more expensive to you as the customer or businesses don't raise prices which means that they don't make as much money now when you don't make as much money you generally don't save and invest as much money and because of that the economy generally begins to grow at a slower pace but on the flip side unfortunately if you don't raise rates and you keep them too low for too long then we have what's called inflation and that

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