Frederic Mishkin

FOMC Cuts Fed Funds To 2%, Discount Rate To 2.25% (Full Statement)

The Federal Open Market Committee cut the Fed Funds Rate to 2% and the Discount Rate to 2.25% today, and implied that weak economic activity and inflationary threats (especially in energy and commodity prices) may offset each other. Since August, the Fed has cut the bank-to-bank Fed Funds Rate 3.25% (from 5.25% to 2.0%), and

Inflation Within Fed’s Comfort Zone

The US Department of Commerce released the February consumer income and spending report today. Incomes increased by 0.5%, more than expected. Spending increased by 0.1%, in line with expectations. And perhaps most important, Personal Consumption Expenditures, the Fed’s favorite measure of inflation, came in at 0.1% expectations, last month’s PCE was revised down, and that

Fed Cuts Discount & Fed Funds 75bps Each, Mortgages Higher

After today’s scheduled FOMC meeting, markets expected a Fed Funds Rate cut of 100 basis points, but the Fed only cut by 75 bps. The Fed Funds Rate, a bank-to-bank lending rate, now stands at 2.25%. The Prime Rate is Fed Funds + 3%, so Prime is now 5.25%. Home Equity Line of Credit 2nd

WeeklyBasis 03/03/08: New Fed Approach: Too Much Disclosure

Fixed and ARM rates rose .5% two weeks ago, dropped .5% last week, then rose about .25% today following an ISM Index number that showed February manufacturing activity better than expected. Rates also moved up on public comments from Philadelphia Fed President Charles Plosser, a voting member of the rate-setting Federal Open Market Committee. He

WeeklyBasis 02/25/08: Inflation or Recession or Both?

Fixed and ARM rates are up by almost .5% since last week, and we’re still seeing .25% to .375% swings from day to day. Rates drop on recession concerns and rise on inflation concerns, and markets can’t decide which is the bigger issue. This is the reason for the volatility, and rates are up because