The last time the Federal Reserve raised interest rates was June 2006…

At the time, a stronger economy allowed policy-makers to hike the rate as high as 5.25% -- a level not seen since January 2001.

Growth in the first half of the year had been strong. Recessionary concerns disappeared.

Unemployment and inflation fell while wages and salaries rose at their quickest pace in five years. Consumer confidence was high…

By 2008, the party was over…

Greed, over-leveraged banks, and subprime mortgages… All contributed to a massive, unexpected fall of the global economy.

The Fed was forced to cut the interest rate to zero.

The jobs market began to worsen.  Consumer spending was declining. The subprime mortgage fiasco sent the market to lows not seen since 1997.

Nowadays, after years of accommodative language and historic interest rate lows, a hike next month has become a very real possibility.

But now is not the time…

By all accounts, the Fed is ready to act and raise rates by at least 25 basis points.

Seventy percent of investors believe the Fed will hike rates.

Another 92% of economists believe it will, too.

And the minutes from the October 2015 Federal Open Market Committee (FOMC) proves the Fed has dropped its concerns about slower global growth and market volatility, as the first increase in the federal funds rate quickly approaches.

In addition, as U.S. Treasury Secretary Lawrence Summers warned in August, “A reasonable assessment of current conditions suggest that raising rates in the near future would be a serious error that would threaten all three of the Fed’s major objectives – price stability, full employment and financial stability.”

Most likely, the Fed is panicking behind closed doors, posturing for the first hike, grasping at straws hoping the seven-year policy was a success…

Unfortunately, it is far too early for the Fed to hike rates…

The headline unemployment of just 5% masks a labor market much weaker than reports suggest.  Clearly, the tens of millions of unemployed Americans, and millions that have simply given up looking for work weren’t counted properly.

If the headline number were true, we’d begin to see rising consumer spending, as well. But as we were reminded in October, consumers aren’t so eager to spend. In fact, U.S. retail sales rose much less than expected for the month, amid surprise declines in auto sales.

That report should cause the Fed to reconsider its rate decision.

If unemployment were truly only 5%, we would see healthy inflation nearing the Fed’s 2% target, as well as increased consumer spending.

We have not seen either…

In fact, we’re well under the Fed’s inflation target, showing little sign of acceleration after three and a half years.

That should be reason enough to hold off on interest rates.

While economists and investors strongly agree we’ll see a higher rate, it’s not very likely given such troubling – and very poor – underlying fundamentals.

Now is not the time for the Fed to raise rates…

This may just be the start of a time of great financial volatility…

A wrong move by the Fed could easily disrupt a fragile global economy already teetering on the brink of financial decay...

Whatever happens, I can assure you we’ll still be afforded the same profitable opportunities we’ve seen in the past… There will be plenty more good stocks to buy on the cheap along the way.

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