re: Forecast when the Fed Reserve will increase interest rates again & how often?

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The Fed has painted themselves into a corner. Traditionally raising rates is a tool to fight inflation.

I believe there is an internal interest rate for a normal functioning economy. When it gets too hot, raise rates, when it gets too cool, lower them.

But because the Fed left the rates low for so long, I think it has effectively changed that internal rate. The whole mother's milk thing.

Interest rates were left so low for essentially 7 years. That's basically about the time of a typical economic cycle.

Our economy is by no means booming. Thus, raising rates will choke down growth. We don't really have any room to lower them, either.

I can't predict what the fed will do with any accuracy, because of the corner they are in. If I have to guess, I'll say no raises until after the fall elections.

As to the question of influence, I think if there was no politicial influence, rates would have gone up long before now.

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This is similar to my yo-yo theory of ZIRP that I have often spewed here--i.e., that ZIRP maintained can turn into a Japanese-style trap, such that every time the FOMC tries to raise rates, the little swoon that follows makes then yo-yo right back to where they started. The abnormally low interest rates causes (in part) the anemic growth, which in turn fosters more abnormally low interest rates--the infamous vicious cycle.

I am on record here for mostly two things about this situation, one theoretical and one practical. The theoretical part is about using direct cash printing by the U.S. Treasury, rather than the Fed banking system, to promote healthy consumer price inflation. The practical part is about how I supported Bernanke's monetary policy from 2008 to the winter of 2010-2011, but was a critic of ZIRP thereafter--not because I was or am an inflation hawk. I'm really not. It's because I am adamant about spreading the message that ZIRP is harmful to the wider economy in and of itself.

Ideally (i.e., when dramatic asset price collapses and deflationary spirals are not serious risks), we should pursue gradually deflationary monetary policy, like the U.S. experienced near the end of the 19th century. This is the standard Milton Friedman position (as is, by the way, the direct printing of money idea, and also, the notion that ideally we shouldn't have a central bank at all).

Practically speaking, however, the FOMC is constrained by law and tradition to pursue moderate consumer price inflation and lower unemployment, when the economically optimal monetary strategy would be to allow for short-term deflation and macroeconomic recession. It's an unfortunate situation, but you can't blame the people who are on the FOMC for it.