The commonly overlooked benefit of Outsourcing

Over the last two decades, more and more businesses have embraced the practice of business process outsourcing and have seen great benefits.

What’s important to note is that business across various industries and of varying revenue generation capabilities have adopted the practice of outsourcing.

The common benefits are clearly visible for all the owners and stake holders involved in the decision. With enhanced technical capabilities and advancements in communication and data handling, business owners were delighted by the access to the large pool of talent that they couldn’t necessarily afford previously.

The economic viability is cited by most as the most important benefit. Most businesses would have to alternatively build a team of professionals

Managers and business leaders now have more time to focus on their strengths and now have the opportunity to direct all their efforts towards the growth of the company.

Departments like customer support, IT management, Marketing, Bookkeeping, Legal services have all been commonly outsourced.

Most critics claim that the lowered cost of operation comes along with the threat of reduced level of efficiency and that even though there is a sense of accountability placed on the respective vendors, the lack of strict quality control often leads to declining levels of output. The naysayers also claim that there is ample room for miscommunication and this causes a dip in effectiveness of the practice of outsourcing.

Select a Modern Service Provider

Modern service providers moved quickly to address this problem and to dispel the myth. Real Bergevin , the co-founder of Nuvest Management Services offers his clientele an assurance of quality standards by ensuring that the teams are spearheaded by qualified professionals who understand the relevant business practices. Nuvest Management Services is a Canadian company that offers services of outsourced bookkeeping and accounting. Having interacted with a variety of clientele seeking assistance on their financial functions, Real and the team at Nuvest provide a powerful alternative to business owners.

A Valuable Proposition to Consider

Real and the team at Nuvest believe that “Staffing an in-house accounting department can be rather costly. Every employee will earn an annual salary, paid time off, sick time, and health care and 401(k) benefits. Apart from the economic benefits, for many organizations the access to an outsourced team of experts in itself is a valuable proposition and many businesses are still amazed by the capabilities of such teams. We have qualified project leaders who ensure that our off-shore teams deliver the best results for our clientele”

Improving Strategic Flexibility

Most businesses would cite the economic benefits as the most commonly observed benefit. Greater study would reveal that the most important benefit of outsourcing is the improved strategic flexibility and the room that it creates to drive innovation.  This benefit is certainly overlooked by many. Leaders with an eye on long term goals would state that this benefit would single handedly win the case for outsourced services.

Business leaders are capitalizing on the expertise of their new partners and are able to set aggressive targets that weren’t economically viable and technologically feasible earlier. In a world that’s constantly pursuing the highest standards of customer satisfaction and loyalty, outsourced services are crucial to achieving organizational goals.

It’s important to acknowledge the reality that outsourcing needs to be done after identifying the most important metrics and also the significance of the benefits of outsourcing. Outsourcing isn’t for everyone and there isn’t assurance of a win-win situation for everyone. By carefully identifying the important departments or tasks that can be bettered, the overall operational efficiency of an organization would grow.

 

                                                                                                                            Nuvest Management Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tech Firm Giants Reacted To the Alleged CIA Dump

 

Different tech firm giants have given their reaction regarding the allegation that their products have been compromised.  Accounts pertaining to the CIA’s hacking tool can be seen on the considerable amount of documents published at Wikileaks.   The spy agency is being accused of successfully developing methodologies to listen on Smart TV and Smartphone.  As of late, the pages have now surpassed the number of documents related to Snowden.

The statement of Apple contains the most comprehensive detail about the alleged infiltration of the spy agency on their tech.  While they do not necessarily confirm the supposed hacking, they affirmed that there were vulnerabilities on their system and they have already addressed it.  They even claimed that the security of Apple gadgets is the most secured programming available today.  They also added that they are dedicated in maintaining that level of security as time passes by.  The software and the product of Apple are intended to deliver the latest security updates directly to their customers.  According to them, at least 80% of their consumers are using the latest firmware.

Based on the initial analysis conducted by the company, the leaked issues have already been addressed which is all thanks to the latest operating system.  The company also affirmed that they are working fast to track any vulnerabilities and work on them.  They ended their statement by encouraging their customers to download the latest operating system to have an access to their latest updates on security.

Wikileaks also pointed out to Samsung’s F800 series that has been supposedly compromised through a hack based on USB connection.  Samsung did not clarify the alleged hacking, and they just assured the public that they are aware about the news and they are currently looking at the matter.  They also reaffirmed their commitment to protect the privacy of their consumer and the main priority of their device is to give the state-of-the-art security.

Microsoft was also the subject of the Wikileaks which claimed that the spy agency has successfully developed the malware specifically to target the windows operating system particularly the OS running on PC.  They released a statement that is similar to Samsung; again they did not authenticate the alleged hacking of the CIA.

Linux-based operating system was also an alleged victim of the possible hacking of the CIA.  Linux is a widely accessible operating system which is not surprising why it is a common target of most hackers.  Google, in contrast, refused to release a statement or comment on the supposed hacking of the CIA on their android device.

A lot of organizations are now pushing the government to release a detailed response regarding this allegation.  They even exclaimed that it is the government’s duty to protect the privacy and keep the citizen secured.  Unfortunately, the details pertaining to the allegations are doing the opposite.  Turning the gadgets that we use on the regular basis into a weapon is severely damaging.  As of late, CIA has not yet confirmed or denied the allegations.

 

Taking all of this into consideration how safe are you?  Is it time to band together and raise the question  of personal privacy according to our rights?

Consider the 4th Amendment and ask yourself   “Is my government paid  for by tax payers  in the United States Protecting our Civil  Rights

 

WannaCry Malware Is Gone But Still Leaves A Lasting Impression

 

Over the past few years, ransomware has become an enormous problem throughout the United States and abroad. It is also a unique problem that is far different from other types of computer viruses. Unlike other malicious software, ransomware is specifically designed with the intent of forcing the victim to hand over their money. On May the 12th, the world was hit with a cyber-attack unlike anything it had ever seen before. The primary weapon of the attack was the WannaCry ransomware. On the Friday of the attack, the nefarious software infected an estimated 230,000 computers in more than 150 countries.

 

Affected by These Attacks are Groups like The National Health Service in Britain

Of course, most onlookers were more surprised by the groups that fell victim to the attack. The National Health Service in Britain experienced major disruptions. Simultaneously, Deutsche Bahn, Telefonica and even FedEx became victims of the hackers. When these companies found out they have fallen prey to the hackers, they received a warning screen on their computers demanding ransom ranging in price from 300 to 600 dollars. All of the files on the computers were encrypted. While workarounds were eventually discovered, it was originally believed that paying the extortion money was the only way to obtain the decryption code to unlock their files.

A Lasting Impression left Behind.

While the WannaCry ransomware attack has ended, it has undeniably left a lasting impression behind. For starters, the vulnerability, which allowed hackers to install the malicious software on the victims’ computers, was previously identified and utilized by the United States National Security Agency. The NSA used the vulnerability to their advantage and did not alert Microsoft. A hacking collective, The Shadow Brokers, gained access to the NSA’s tools and documents late last year. Originally, the group attempted to auction off the tools used by the NSA. Microsoft became aware of the problem after leaks from the hacking group. This gave the technology company plenty of time to release patches, but obviously not everyone installed the patch in time.

The Impact

After the attack, Kaspersky Lab analyzed the impact and confirmed that Russia, India, Ukraine, and Taiwan were hit harder than other companies. However, the National Health Service were disrupted the most. Vape technology, tablets and smartphones were generally invulnerable to the attack. In fact, it only impacted older Windows computers that had not been upgraded to the Windows 10 operating system and the latest patch. While experts concur that the impact of the attack was relatively low, it could be a sign of things to come in the near future.

For instance, security experts agree that the results could be far direr had the attacked targeted something more dangerous, such as nuclear power plants or railway systems. At the end of the day, WannaCry might be finished, but it could easily return in the future. The Wall Street Journal and others believe the attack could be linked to North Korea. Whether or not that is true, one thing is certain. Cyber security firms will need to take steps to address these security risks and flaws as quickly as possible. Failing to do so could result in something far worse in the future.

 

Generation Z – Their Approach to Work and How to Handle Them in the Business Environment

Following Millennials, generation Z is represented by today’s tweens and teens buzzing with novel ideas and holding great promise for tomorrow’s business. Tapping into their approach to work and how to handle them in the business environment is vital.  They go by many names, ‘iGen’, ‘gamers’, the ‘App generation’, the ‘Selfie generation’, ‘post-Millennials’ and the list may continue. What sets them apart from previous generations, generation X, Y, Baby Boomers and Millennials is their unique approach to work.

Born between 1995 and 2012, generation Z comprise of 1% of today’s American working population and is estimated to grow to 7% by 2020. Making their first steps into the era of booming technology, it’s no surprise at all that they are digital natives, learning to use the tablet before they even talk.

Learning to use digital technology and social media from very young ages, gen Z-ers are extremely versatile when it comes to work. Growing up with successful online businesses like Booking.com, Airbnb, Uber, Facebook, and already old Google, Apple or Microsoft, not to mention digital marketing, they already have a very clear idea how to generate income online and how to run a successful online business.

According to Sean McDowell, Ph. D., professor of Christian apologetic from Biola University, iGens are entrepreneurial thinkers and individualistic by definition. Statistics indicate that 72% of them are more likely to reject the ‘shackles of employment’ and start their own business.

Inborn progressive thinkers, generation Z are constantly on the lookout for quick recognition and validation through social media, which is why they tend to be rather withdrawn from society. Does this mean they can’t work well in a team? No, not at all, they simply have a different approach to teamwork. Forward-minded as they are, they have an innate ability to multitasking. So, for them juggling between tasks comes naturally. After all, they’re gamers and as such they’re also strong team players, socio-psychologists suggest (learn more from getabstract.com).

Who says that generation Z only enjoy working with their peers and resent cooperation with authority figures? On the contrary, gamers are keen users of social media, which for them has a double purpose – networking and research tool. This means they are open to collaboration and above all, communication and feedback, which can be implemented in the business environment easily. Additionally, remember that they were born and educated in a world promoting diversity and equality regardless of race, religious beliefs or sexual orientation (some may have even been raised in same-sex families). Therefore, they value acceptance and togetherness despite the differences between individuals, expecting to find the same at the workplace. Here are a few tips how to handle generation Z employees.

How to Handle Generation Z in the Business Environment

Tapping into gen Z psyche is not easy. One thing is unquestionable about generation Z employees, and that’s CREATIVITY. They want to stand out through innovation. At the same time they are perfectly aware of the pitfall that ditched Millennials, therefore, they have a clear understanding that the key to success is hard work and perseverance offline. This is why they seize every opportunity they can to prove themselves.

Imaginative as they are, gen Z-ers would fit perfectly in a business environment where they are able to explore, experiment and nurture innovative ideas. At the same time they’re on a constant lookout for opportunities to develop their skills or acquire new ones, which is why mentor-ship will always come before financial reward for a generation Z employee. However, as gamers, they will always be looking for a challenging business environment and more gamified incentive systems. Having a sharp sense of criticism, these ‘new kids on the block’ just about to enter the workforce are constantly seeking ways to manage and improve their image both on- and offline.

Being constantly connected with the ‘outside world’, they know exactly what is trending at the moment. With a very short attention span (8 seconds), they have the ability to quickly discern what is worth their attention and effort and what not, and this is what stirs their imagination and how they can contribute revolutionary ideas to your business and push it to the top. They may not have decision power within the organization as yet, but they hold big promise.

 

Highly Individualistic and Independent

Highly individualistic and independent as they are, App generation employees will appreciate constant feedback from their superiors (which is where working with authority figures comes into play). As a good leader and manager, if you wish to retain a gen Z-er you should probably reconsider your employee evaluation system to accommodate (if not replace altogether) the formal, annual appraisal one-on-one sessions with ongoing, informal reviews.

Much as they favor the idea of being their own boss, sociological studies suggest that this digital generation’s ostensible tendency towards entrepreneurship is the manifestation of a survival mechanism rather than the desire to be rich and famous. What these youngsters need is actually something stable to rely on like a secure job that earns them a decent and steady income.

 

What Sets Millennials Apart

What clearly sets them apart from their Millennial predecessors notorious for their lack of focus, generation Z are planners. With a rich generational heritage from their sell-supporting generation X parents, gen Z-ers look for jobs in less-automatized areas like sales or education. With stability in mind, they seem to always have a very well developed plan B available to help them stay afloat in an ever-shifting economic environment. That is why more often than not, they will opt for a career that offers them financial stability. The ideal workplace for a gen Z-er is therefore one where he can enjoy autonomy, flexibility, support for personal development and initiative, and honesty.

Considering all the aspects revealed about this intriguing new generation, the take-away is this: a gen Z employee is a must-have asset for any business as they can bring a whole set of fresh ideas, hard work, ambition to succeed and eagerness to learn and grow with the company. To incentivize generation Z employees, nurture the differing values and traits that define them, help them succeed and integrate in your multi-generational workforce, and they will give you the best they have to make your business great.

 

 

 

Drones and How They Change the World Stock Market

The FAA is opening air space for commercial activities related to UAV, or unmanned aerial vehicles, otherwise known as drones. This will heavily effect markets in stock as the drone market is seeing the global UAV market at about $15 Billion per year, growth up to $20 Billion annually by 2020.

The small cap stock sector is taking notice as drones, which range in cost from $2,000 per unit, to be used by farmers, up to $160,000 for military style devices equipped with infrared cameras, sensors and technology piloted from the ground.

Agriculture will claim 80 percent of the commercial market for drones. In just ten years, every farm will be using them for assessing water problems, issues with insects, observing roaming herds and stock, advanced monitoring of crop yields, which will save farmers time and money. Currently much of this data is obtained through satellite monitors.

Once the Federal Aviation Association establishes guidelines, it will open 100,000 jobs in the UAV industry.

Aljazeera America released a news story, May 16, 2014 from the crowded convention floors of military and non-military drones. Visitors from all over the world were present at the displays.
Now that military drones will be returning home to the U.S. with the troops, military manufacturers are reducing prices for drone components.

Civilian manufacturers are displaying drones for non-military purposes that range in size from computerized helicopters that fit in the palm of the hand to unmanned aircraft size planes, now on the market.

Startup competition is fantastic, growing in markets in stock presence, with over 50 companies alone with designs of drones with 10-foot wings spans, now that prices for components are dropping.

 

Phil Ellerbroek, director of sales at RoboFlight said the firm is set to post “triple-digit growth in drone sales and hardware in 2014”.

NASDAC: AVAV – AeroVironment, INC., Monrovia, CA, engages in design, development, production and support of UAV’s. Revenue reached $325 million in 2012, market cap now $503 million. 52-week trading ranged $21.14 – $34.28.

NASDAC: NTSC – National Technical Systems, Calabasas, CA, leading provider of engineering and testing services, offering end-to-end service for UAV in North America. Market cap approximately $81 million, 52-week trading from $4.02 – present at $7.++.

NASDAC: ASTC – Astrotech Corp., Austin, TX, provides support for UAV launch vehicles. Leads in provision of commercial aerospace services, (30 years). A first space commercial company. Market cap approximately $21 million. 52-week trading range $0.50 – $1.34.

Keep your eye on the following markets in stock: NYSE symbols: DCO, CVU and ORB.

Sources: https://www.avinc.com/, https://www.nts.com/, https://www.ducommun.com/, https://www.astrotechcorp.com/, https://www.aboutsmallcap.com/2012/07/25/large-unmanned-aerial-vehicle-market-expected-to-keep-on-growing/

 

Managing Your finances With Technology

Checking your bank account on pay day can be one of the most satisfying feelings of the month, but unfortunately that feeling is often short lived. Once you’ve paid your rent or mortgage, your energy bills and your taxes, you can often be left with very little to spend on anything other than food. But although your smartphone now adds another big bill to your monthly outgoings, it can actually help you keep track of your finances and even save money. Here are a few ways technology can make managing your finances much easier.

Pay the Best Price for Products and Services

One of the best ways to make your money go further is to make sure you’re paying the best price for products and services. Often if you’re buying something from a store in person you could be paying a lot more for it than if you were buying it online. You can now even get apps on your phone like Barcode Scanner that will let you find out whether a product is available cheaper online by just taking a photo of the bar-code. If you can find it online cheaper, you could save even more money by visiting sites like Coupon Follow and Deals Plus to find discount codes that can get you a percentage off the price or even free delivery.

Check Regularly for Promotions

By taking the time to shop around and checking sites regularly for promotions you can really save a lot of money. When you do buy from your favorite stores, booking sites or even casinos take the time to sign up for their newsletter as they will let you know when they’re running sales on their range of clothes, electrical products or DVDs. If you’re a fan of playing casino games, there are even some really lucrative casino promotions to take advantage of on the internet. Casino affiliate site Red8’s regularly run casino promotions on their client’s behalf, ensuring that customers get to enjoy the latest bonuses.

 

Check Energy Savings Opportunities

You can even save money on your energy bills by checking whether you’re on the best tariff from the comfort of your mobile phone. Sites like Choose Energy will compare all of the energy providers in your state and based on your energy usage tell you what the cheapest deal for you is. Although switching energy providers might sound difficult, the website takes the stress out of switching for you and within a few clicks you can be saving hundreds of dollars every year.

View your Bank Account Regularly

Although discount codes, casino promotions and comparison sites can save you a lot of money, the best way of managing your finances is probably to keep an eye on your bank account. Luckily most major banks now have smartphone apps that mean you can check how much money you’ve got 24 hours a day, wherever you are. So whether you want to make sure you have some money saved up for something special or just want to stay out of your overdraft, these banking apps can be a real stress reliever.

              Keep a Sharp Eye on Your Finances With Your Smart Phone

The Importance of a Solid Marketing Plan to Make Your Company Investable

The most successful company owners all have a number of things in common, one of which is at least one eye constantly fixed on the future. Settling happily for things to continue as they always have is rarely enough for these people. Instead, they are always looking for the next big step, both for them and their business.  Future growth and expansion often relies on outside investment, and attracting this should be a priority for any business owner. A strong marketing plan plays a key role in making sure that you win the game.

 

                                                         What makes a good marketing plan?

 

 

  • Tell the story.

    Human beings remember stories far more easily than plain facts and figures. Make your story engaging and exciting by giving it some drama and direction.

  • Make it real.

    Prove that the story is backed up with solid evidence and grounded in careful consideration of all possible outcomes. Be prepared to address any concerns and challenges with strong answers.

  • Make it special.

    Generic marketing plans that could apply to any business are of no help or interest to anyone, so ask yourself what makes your business unique and make sure this comes through as a key theme.

Finally, and most importantly, a marketing plan is only ever as good as the way in which it is communicated. Even the strongest marketing plan will fail if investors do not see it or if it is presented to them in a weak way. Online marketing is critical for maximizing exposure in the modern business world. Seeking expert advice from specialists in this area such as the Matomy Media Group is invaluable, and finding out more about the Matomy story  is a great. story

Why is a marketing plan important?

 

An unfortunately common risk in the business world is too much focus on the day to day running of the company and driving up profit. While this is of course critically important, it has the potential to become a problem when other areas are neglected as a result, particularly when such areas might not yield immediate benefits but are absolutely essential to meeting long-term business ambitions.

Investors Like a Solid Marketing Plan

Investors like to see solid marketing plans when they are making decisions about putting their cash into a business, as they demonstrate that future plans have been carefully thought through and not simply speculated about. A solid marketing plan will also emphasize potential by highlighting possible new customer bases, exciting new markets that can be tapped into, and other areas for development in the next few years and this is what you need.

                                Planning for success

 

Investors are attracted to businesses, and individuals who own those businesses, with ambition. At the same time, they are careful with their money and will only invest if they feel confident that the investment will yield a solid return.

 

 

You Need a Strong Marketing Plan to Get Attention

A strong marketing plan is a perfect opportunity to demonstrate a balance between these two qualities. If prepared well, it will show that a business owner has thought carefully not just about the possible destination of their business, but each step of the journey as well.

 

Using Social Insights for Business Strategies –Getting Started with Social Intelligence

 

Social intelligence is an integral part of business strategy, especially at present when social media is a major factor in any online marketing campaigns. It starts with listening to everyone who is mentioning your brand, products and/or services. These include customers, competitors, and industry experts, just to name a few.

Social intelligence allows you to better understand your customers, and allow you to make smart decisions when it comes to business strategies. You can achieve social intelligence by turning the social media big data into action and insights. It will be integrated into your business process and shared across all the company’s systems and departments.

Learn Social Listening

The first step of social intelligence is to learn social listening. You should be able to monitor social media for data regarding the company. This is done by tracking blog contents, Twitter, mainstream news sites, Facebook and other social networking sites, YouTube, forums, Flicker, message boards, and others.By gathering data from social media, you will get better insights on how consumers and competitors view your company. It will also allow you to discover keywords and social trends.

 

Develop Social Programs and Policies

It is important that you develop social programs that are flexible. Just make sure that the right policies and standards are in place. These policies protect the employees and the brand. The social media policies should include what information can be shared and who can share them. Not only that, but also there should be a crisis escalation plan so that the company is prepared to handle any crisis in the future.

Turn Data into Useful Insights

Data is useless unless it has been analyzed. Social media measurement is more than just monitoring Twitter followers and Facebook likes. You should establish key performance indicators so that you can easily measure the business’ goals. When analyzed right, the social data can be used to come up with smart business decisions.

Find Ideas for New Content

When it comes to online marketing, content is still the reigning king. Social intelligence allows you to learn the latest trends that you can use for content ideas and marketing campaigns. By listening to your target market, you will be able to promote your products in the language they use.

Engage with the Community

Social intelligence allows businesses to engage with their target market in a more personal manner. Not only that, it fosters the development of a community around the brand. One way to establish a positive brand image is by engaging your potential and existing customers. It shows that you value their opinions. Communicating with them through social channels will inspire them to take action, improve brand awareness, and develop loyalty.

Social intelligence requires a lot of time and money. However, when done right, the investment will be helpful for the long-term success of the business.

 

How Beginners Prepare for Stock Market Trading

 

Trading on the financial market can be a fascinating activity and a great way of making some money. For those with the time, commitment and knowledge, it can even become a primary method of income, netting sizeable rewards. And even if you can only commit a limited amount of time to the market, you can still provide yourself with a nest egg for your retirement.

But while the opportunities are almost limitless, the risks are also very real. Starting to trade and invest in stocks without any knowledge or preparation is a sure way to lose everything. Nevertheless, there are straightforward ways of preparing yourself to take on the market that will give you a good chance of coming out a winner.

Study the market

You can start simply by following the market. Yahoo and Google both offer finance coverage – these are great places for beginners to study how the market works. As you grow more confident with the terminology, you can move on to the Financial Times or the Wall Street Journal. That way you’ll learn to spot trends, read analyses and pick up on economic concepts and jargon. There are many sources, both online and off, for useful articles.

Follow the greats

When you have the time, you should also consider reading a few of the many books on the subject of investment and stock trading. As a general rule, avoid the more sensational volumes that promise to make you a millionaire overnight. Look out for the major names in the field, such as Warren Buffett or Benjamin Graham. Many of the strategies applied sixty years ago are still valid today.

Take a course

If you’re really serious about getting involved with investing and trading on the financial market, then it’s a good idea to enrol on a professional course to learn the basics. The foreign exchange market, or forex market, is the world’s largest financial market and is open 24 hours a day, with international currencies constantly traded against each other. Forex trading courses are available that will show you how to make money on this market, whether it’s going up or down. Financial opportunities are always available if you know how to seize them. The risks are minimal if you know how to protect yourself, and trading for just an hour a day can be enough to earn you a sizeable tax-free secondary income.

Open an account

The next step is to open an account with a reputable online broker. You might want to find one that offers virtual trading as well, so that you can practise without taking any risks, until you get the hang of it. Use online forums to ask questions and pick up advice, and better still, get yourself a mentor who has experience of stock market trading. This is a tried and tested way of progressing for all successful investors.

Most importantly, establish your financial goals and how much you can afford to invest before you start. Generally, it’s best to start small and stick to one simple strategy. Treat any winnings as a bonus while you’re learning the ropes, and have fun!

 

How to Really Benefit from Low Interest Rates

 

 

 

 

98% probability of interest rates remaining at their current rate

The current interest rate is 1.00% – 1.25%. The Fed has not indicated any desire to increase the federal funds rate at its next meeting on Wednesday, 1 November 2017. According to the CME Group FedWatch tool, there is a 98% probability of interest rates remaining at their current rate when the FOMC meets within a month. However, the likelihood of a rate hike at the final meeting of the Fed FOMC on Wednesday, 13 December 2017 is currently 76.4%. By contrast, the probability of interest rates remaining at the current level of 1.00% – 1.25% is just 22.1%. The importance of probability estimates vis-à-vis interest rates cannot be understated. Since August 25, 2017 through September 22, 2017, we have seen an increasing probability ranging from 37.8% to 71.4% that the target rate will increase by 25-basis points.

Monetary and Fiscal Policy: Interest Rates

Current forecasts are based on the estimates of leading economists, analysts and stakeholders. If the Fed deems it appropriate to raise the federal funds rate, this will have a dramatic effect on the USD and the US economy. While the impact of a rate hike is typically priced in to the value of the USD well ahead of time, the actual announcement will cause a slight bump in the USD. For example, interest rate hikes are typically indicative of an improving economy. When the inflation rate (CPI figures) begins to rise, this means that the purchasing power of the USD may be declining. To keep the economy in check, the Fed has several tools at its disposal, notably monetary tightening (rate hikes and unwinding the $4.5 trillion balance sheet). Fiscal policy can also be used to tighten economic conditions by raising taxes, and reducing government spending. However, neither of these fiscal measures are likely given the Trump administration’s policy of tax breaks and massive government stimulus. Therefore, it will be up to the Federal Reserve Bank to adjust monetary policy to prevent inflationary pressures and to keep the USD strong.

The Nonlinear Relationship between Interest Rates and Stock Markets

Low interest rates – as they currently are – will last for some time, but there is a trend towards a gradual tightening of interest rates. If the Fed raises rates before the end of 2017, the federal funds rate will rise in the region of 1.25% – 1.50%. Further rate hikes will be forthcoming in 2018. Right now, we are seeing an increase in the number of personal loan applications as individuals take advantage of historically low interest rates in the country. Any increase to the federal funds rate will invariably spill over into other areas of the economy, and make all lines of credit relatively more expensive. This is particularly true of credit cards which are associated with high APRs, business loans, mortgage loans, automobile loans, student loans and the like. Provided it is feasible to finance a line of credit, it is always better to do it when interest rates are low. Typically, the bulk of payments on personal, business and mortgage loans go towards repaying the interest on the loan. In latter years, the principal amount is repaid. The Fed is also cognizant of the rising level of household debt in the US, and how an increase to the federal funds rate might affect that. If the FOMC decides that conditions are rife for a rate hike, this will provide a short-term boost to Wall Street, but ultimately the increased costs of loans will lead to a slight decline in share prices and profitability, but consumers will ultimately bear the burden.