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Title: Interest Rates Could Go Up In 2007
Category: Other
Blog Entry: The conventional thinking is that the weaker U.S. housing market is slowing down the general economy. Most market players expect the Fed to start cutting rates in the latter half of 2007. I think that the surprise is that the Fed might actually raise interest rates.

So far, the U.S. economy is proving to be resilient, creating jobs and higher wagers. Furthermore, the recent drop of oil prices to the low 50's from the high 70's is putting more money back into the pockets of the consumer. With this type of economic stimulus, it's less likely that the Fed will need to lower interest rates.

England went through a similar economic cycle where a weaker housing market slowed down the economy. Thanks to strong business activity and foreign investment, the British economy strongly rebounded. As a result, the Bank of England raised interest rates. The same scenario could be in store for the U.S.