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

Both the bond market and the stock market are now predicting the U.S. is going to have a recession this year.

The Fed generally does not raise interest rates when a recession is on the horizon.

True.

It's becoming the consensus belief that the Fed had talked itself into a corner by talking about raising rates for so long (over a year and a half) that it was losing credibility so it raised rates in mid-December as some kind of "shite or get off the pot" statement.

Even yesterday in Fed Chairwoman Yellen's statement to congress she reiterated that the Fed's intentions are to raise rates again "gradually" as the "data indicates."

IMO, she's bluffing.....

You may be right, and your prediction is almost exactly what I originally predicted the my first post.

But if there is a recession in the U.S. and the Fed raises rates anyway, there will be political hell to pay.

This is exactly why I think things will get strange...The Fed may want to do one thing...and there will be hardcore political pressure to do another

Maybe this is why we appreciate that The Fed is supposedly neutral and unimpeded by political will?

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I'm in the minority, but she is the wrong person for the job, and the Fed has made numerous blunders in recent years. Her best work in my opinion was during her fairly short gig at CBO.

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I would have been content to see her stay with her comrades at UC Berkley.

Can you imagine the shape we'd still be in if this mumbling lunchbox had been Fed Chair during the financial crisis?!

I think it was you who made a comment on this in the thread about Yellen's committee meeting.

The left wants her to be as accommodating as possible and the committee members made that point clear. Thank God the Fed is an independent entity. If congress ever gets oversight it would open up the flood gates. I have recently changed my stance on this issue.

I think Yellen is intelligent, but has lost her credibility over the past 2 years. If she drops the rate, why would any market participant listen to forward guidance? I also wonder how much political influence actually affects (maybe clouds) her decision making.

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How can you call the Fed. independent in one sentence, and question whether politics clouds her decisions in another sentence?

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Political influence does not imply control. I was stating that I am glad there is no congressional oversight and the rate decisions are not decided by congress.

If the Fed is questioning lowering FF back down to near 0 or even negative it would leave me no doubt that her decisions are affected by politics. Yesterday she was asked about negative rates. She said they "would consider it." I think she said this to please those members of the committee and telling them what they want to hear, not because they actually are considering negative rates.

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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.

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market valuations are also increasing

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Nope. Market valuations as measured by trailing P/E has decreased from 20.44 down to 15.25 for the forward P/E on the S&P500 over the last 12 months.

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Inflation, debt levels, interest rates....What does this mean for investors??????????

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The same as it always has, well managed companies will grow earnings, there will be market volatility, some new highs will be set as well as some new lows, some companies will go bankrupt, there will be some spectacular new start-up companies with IPO's, there will be mergers and acquisitions and 20 years from now the stock market will be higher than it is now, probably double or even triple than what it is now.