Federal Reserve to increase interest rates by 75 basis points
federalreserve.gov
Federal Reserve to increase interest rates by 75 basis points
1–10 of 329 posts
Re: Federal Reserve to increase interest rates by 75 basis points
#2what does this mean/imply:
> In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities
Re: Federal Reserve to increase interest rates by 75 basis points
#3damn, inflation in my country will be crazy after this. our gas prices are already really high (the government had to subsidize it until the end of the year to have a chance of being reelected). now probably this crazy politic will be nullified since the dollar will get more expensive
Re: Federal Reserve to increase interest rates by 75 basis points
#4what does this mean/imply: > In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities
The fed has been keeping the prices of these artificially inflated through QE. They've stopped buying (they aren't selling yet, but simply letting securities mature) and the massive reduce in demand leads to a decline in prices of the corresponding assets.
Re: Federal Reserve to increase interest rates by 75 basis points
#5what does this mean/imply: > In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities
Currently, it means they will continue to let some small part of the securities the Fed hold on their balance sheet mature without immediately re-investing the proceeds.
Outright sales of these securities are another option that they seem reluctant to do at this point.
Either way this has the effect of reducing the amount of money in the system (the opposite of QE where they created money out of thin air to buy the securities in the first place).
Re: Federal Reserve to increase interest rates by 75 basis points
#6Very good. This is going to hurt quite a bit, but is going to prevent real pain in the long run. Much like something we should have all done a year ago.
Re: Federal Reserve to increase interest rates by 75 basis points
#7Is 75 basis points correct? The actual press release appears to describe an increase from 2-1/4 percent to 2-1/2 percent, which is only 25 basis points. It says it "anticipates that ongoing changes in the target range will be appropriate", but that's not the same as making additional changes now.
Re: Federal Reserve to increase interest rates by 75 basis points
#8Funny that this would rocket to the front page so quickly. Shows where everyone's minds are at.
A lot of folks were banking on a pivot by the fed but they failed to understand how seriously the fed now sees inflation. Sure, the fed could/should have raised even higher, but consider they need to orchestrate a less disruptive start to our next recession. They're still doing QT as well, which will also help tame inflation.
Re: Federal Reserve to increase interest rates by 75 basis points
#9Is 75 basis points correct? The actual press release appears to describe an increase from 2-1/4 percent to 2-1/2 percent, which is only 25 basis points. It says it "anticipates that ongoing changes in the target range will be appropriate", but that's not the same as making additional changes now.
https://www.newyorkfed.org/markets/reference-rates/effr
It was 1.50 - 1.75 before.
Re: Federal Reserve to increase interest rates by 75 basis points
#10Now if we can only get states (like California) to stop giving out stimulus payments (they literally calling it inflation stimulus; learn economics 101) and drop student debt forgiveness nonsense. The fed is trying to curb inflation, while politicians are trying to get re-elected at any cost, fighting the fed.