Every August, the Kansas City Federal Reserve holds a conference in Jackson Hole, Wyoming, located in the Grand Teton National Park south of Yellowstone National Park. It is lovely setting for a conference, at this particular conference economists gather to talk about the National economy and hear the keynote speech from the Fed Chair Jerome Powell. Chairman Powell sees an economy running with low employment, partly as a result of baby boomers retiring, and believes a rate hike or two would allow the economy to continue to do very well and inflation to be curtailed. President Trump has offered his opinion that he would like interest rates charged to the banks to be low, but Fed Chair Powell sees the world differently. (It would be more practical to President Trump’s base to have VISA and Mastercard lower rates, but President Trump does not tweet or do anything about those rates and thus owning and continuing to own those shares is rewarding).

According to Howard Schneider and Ann Saphir of Reuters, Federal Reserve Chair Jerome Powell will continue to raise rates in September and December. Traders have kept their bets on these rates happening. By next year rates should be in the range of 2.75% up from the 1.75% they are at present. The Fed typically deals in concepts of full employment and the definition sometimes changes as will continue to do things on a gradual basis.

Linking to dividend paying stocks, while all companies run on credit which means interest rates is a cost to doing business, as long as the adjustment to raising rates is expected and can be priced into the goods and services sold, then dividend paying companies will continue to pay dividends.

There are more questions than answers, till the next time – to raising rates.