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Strategies & Market Trends : John Pitera's Market Laboratory
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To: isopatch who wrote (16845)3/19/2015 11:05:05 AM
From: The Ox2 Recommendations

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Hawkmoon
mary-ally-smith

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I'm not sure we'll need another QE in the USofA. It's my view that when the rates start to rise, the banks (who've had had zero incentive to do so) will start to consider loaning out more money. Currently, they are borrowing for nothing and likely buying treasuries and other "assets" that give them a solid, steady return relative to market...but without taking any risk.

They'll start to consider adding lower 'risk' related loans where they can achieve larger returns, as rates improve and their borrowing costs rise. That will help the economy move forward slightly better than we're at right now.

As rates continue to rise, they'll (very slowly) become more tolerant with their lending. As the purse strings get loosened, each notch will translate into more money for "main street". This will be a very slow process but it should help improve (slightly) the sluggish movement towards a more 'normal' economic cycle.
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