If there are any readers of this blog - highly unlikely - than you know that I do not think the Fed will "raise rates" in 2015.
What I mean by "rates" is the Federal Funds Target Rate, currently at ~0%.
I believe that the Fed is trying to persuade markets to act as if a rate hike was coming rather than actually raising the rate itself. I don't think the economy can afford higher rates, and I don't think the Fed has the balls to raise them in the face of worsening economic data.
What I mean by a rate hike: The Fed, in 2015, will NOT raise rates beyond a "ceremonial" 25, 50, or 75bps at anytime in the near future. The Fed may in fact raise the Federal Funds Rate to 0.25%, 0.5%, or 0.75% in the next year, but nothing beyond that.
What's the difference between 0 and 0.25? A rounding error. This "hike" is therefore ceremonial; its an attempt to show the markets that the Fed has credibility. The Fed knows full well that anything much higher than 75bps will break down the system; they aren't stupid.
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