Fed Ends Zero-Rate Era
bloomberg.com
Fed Ends Zero-Rate Era
1–10 of 361 posts
Re: Fed Ends Zero-Rate Era
#2It'll be interesting to see how this affects the lending models spawned from low interest rates.
Re: Fed Ends Zero-Rate Era
#3It'll be interesting to see how this affects the lending models spawned from low interest rates.
From the FOMC statement, it doesn't sound like the low rate environment will disappear too suddenly:
"The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run."
Re: Fed Ends Zero-Rate Era
#4[deleted]
Re: Fed Ends Zero-Rate Era
#5It will also be interesting to see how much of the FED Assets [1] will need to be sold directly or indirectly in open market action to get to their target rate.
Re: Fed Ends Zero-Rate Era
#6Finally! In 2-3 years bonds will actually yield something.
Re: Fed Ends Zero-Rate Era
#7Sell volatility (VIX)
Re: Fed Ends Zero-Rate Era
#8This was very much in line with expectations, ergo the muted reaction in the markets. It's worth noting that the Fed used gradual in lieu of measured to describe the increase. Measured implies a steady series of increases (announced every few meetings until the target rate is reached) versus a gradual approach in which there's a long term number in mind but no strict mandate on getting there - a dovish tone.
Re: Fed Ends Zero-Rate Era
#9It'll be interesting to see how this affects the lending models spawned from low interest rates.
Looks like the stock market reacts positively to the rate hike. But its effect on the general population remains to be seen, specially in the mortgage industry. Will more people shun buying houses? Banks are more willing to lend money with higher interest rate.
Re: Fed Ends Zero-Rate Era
#10It will also be interesting to see how much of the FED Assets [1] will need to be sold directly or indirectly in open market action to get to their target rate. [1] http://www.federalreserve.gov/releases/h41/Current/
In the full text of their announcement, they said they will not be selling any for the time being. They will continue to reinvest the principal as well. They will be using other mechanisms to achieve their target.