Rates drop back to record lows after Fed says it’ll hold overnight rates near-zero until late 2014.
Archive for the ‘Fed Funds Rate’ Category
Strong Consumer Spending To End 2011
Today’s stat summary: Mortgage applications, retail sales, factory orders, Fed’s new rate communications policy
Rates Down: MBS Rebound After 10Yr Auction, Fed Meeting
Rates started the day up, but have since dropped. Here’s why.
If Fed Funds Are 0%, Why Are Mortgages 4%?
How Fannie and Freddie impact the Fed Funds overnight rate.
How Fed’s Latest Plan Lowers Mortgage Rates
Rates again hit record lows today as investors piled into mortgage and Treasury bonds/notes after the Fed confirmed Operation Twist and said they’d buy more mortgage bonds. Below is an explanation of each strategy in simple terms. Operation Twist is a Fed strategy where they shift their debt holdings to longer-term securities. Between now and [...]
The Only Question to Ask Ben Bernanke
Anyone who watches Bernanke’s Congressional testimony knows that lawmakers ignore his testimony because they’re too excited about Q&A—a chance to drill their vote-pandering messages in question form (e.g., Why does Fed help banks and not consumers?). Then Bernanke repeats the economic outlook and FOMC strategies he just laid out moments before. Today’s 2:15 ET press [...]
Thomas Hoenig To Retire. Will Richard Fisher Step Up As Fed’s Low-Rate Dissenter?
Dallas Fed president was out in force last week with anti-inflation warnings, first during an interview with Reuters, then during a speech in Brussels. Yet throughout the crisis recovery period, he’s used his position on the FOMC to vote for near-zero overnight rates and to press forward with two rounds (and more than $2 trillion [...]
No Fed rate or QE2 change. Rate advice for consumers.
Today’s Fed statement acknowledges economic recovery is on “firmer footing,” and while the Fed acknowledges inflationary concerns, it’s choosing to ignore inflation pressure for now and keeping overnight bank-to-bank target Fed Funds Rates at 0-.25%, and keeping the overnight Fed-to-bank Discount Rates at .75%. They also said they’d keep going with their second round of [...]
Fed’s Hoenig Is Right That Rates Are Too Low, But Nobody’s Listening. Except FoxNews.
In the classic movie Big, Tom Hanks, a boy trapped in a man’s body, watches 40-something toy company executives pitch a new toy and responds with a simple boyish dissent: “I don’t get it.” This direct approach breathes new life into a staid environment, reinvents the toy, and the company goes gangbusters. It’s not quite [...]
Fed Up, Again: Steve Hanke on why near-zero Fed rates are causing a credit crunch
In a new piece called Fed Up, Again economics professor Steve Hanke makes his case for why the Fed must hike hike overnight bank-to-bank rates from .25% to 2% in order to end the credit crunch their existing low rate policy has caused. Below is an excerpt explaining the concept clearly using retail bank lending. [...]
