The FOMC can't
cut the Fed funds rate anymore, so it relies on language in its FOMC Statement to tell economic actors that Fed funds will be «exceptionally low» for an «extended period.»
The Federal Reserve voted to
cut the fed funds rate (short - term interest rates) by a half - percentage point to 4.75 percent.
It was the first time the central bank had
cut the fed funds rate since June 2003.
There are many calling for the FOMC to
cut the Fed funds rate.
If the FOMC
cut the Fed funds rate to 3 %, that might normalize things, but for now they will be content with half measures like temporary injections of liquidity.
This has of course not kept a Fed economist from concluding in mid 2009 that the Fed's past policy stance as well as the «rules» would theoretically require the Fed to
cut the Fed Funds rate well below zero (pdf).
In the US, the Federal Open Market Committee (FOMC)
cut the Fed funds target by 25 basis points to 1 per cent at its meeting in late June.
In contrast, the FOMC successively
cut the Fed Funds rate in attempts to avoid recession in 2000 - 2002 and 1981 - 1982.
If I was Greenspan, I would at least
cut the Fed Funds target by a quarter at about 10:15 A.M. on Monday, giving the markets just enough time to digest any initial sell orders and providing something of a base from which to rally.
That will be tricky given that 10 - year Treasuries currently yield below 2.20 per cent and this would decline precipitously with a recession and any move to
cut Fed funds.
Fed Governor Plosser suggests that they have other tools they can use, without
cutting the Fed funds rate.
Not exact matches
Fed Funds futures are still suggesting the next
Fed policy change is a
cut in rates.
Historically, the
Fed has responded to recession by
cutting rates substantially, with the benchmark
funds rate falling by 400 basis points or more in the context of downturns over the past two generations.
Let's not forget, Sept 2008 as Lehman and AIG were collapsing the
Fed funds rate was still at 2 %, only to be
cut a few weeks later.
The
Fed hopes the nearly unprecedented 1.25 percent
cut in the
funds rate in just eight days — lowering it to 3 percent — will ease pressure on upcoming hikes in adjustable rate mortgages.
Yes, Sector 7, and in the same vein, how are you pro-life, yet want to
cut funding that will support,
feed, and educate disadvantaged children.
The first is that there should be financial support for the National Infant
Feeding Network, which I understand had its
funding cut in 2014.
As
funding for education programs face dramatic
cuts under some plans, we must work to ensure keeping students well -
fed and ready to learn remains a top priority.
Proposals in both the Senate and House would
cut funding to SNAP and reduce
funding available for poor residents to
feed themselves, said Kate Maehr, executive director of the Greater Chicago Food Depository, which will release its report Friday.
In a report issued today focusing on the recession's impact on the budgets of New York and New Jersey, the
Fed branch also recommended the states create «rainy day»
funds to protect against future revenue gaps, plan in advance for spending
cuts and reduce reliance on personal income taxes, which are affected by changes in the economy.
The
fed - up governor is expected to propose
cuts to education and local - government
funding in the near future as additional «budget extenders.»
This is
feeding the demonisation of people on benefits Disabled people have already suffered the most under this government's
cuts to social security — with the failed Work Capability Assessment for Employment and Support Allowance (ESA), the
cuts to Disability Living Allowance (DLA), the closure of Remploy and the forthcoming abolition of the Independent Living
Fund.
But when people — whether politicians or that guy in your Facebook
feed — say they want to
cut science
funding, they won't be speaking about science as a whole.
Fed up with gaping budget shortfalls, inadequate education
funding and insufficient revenue, the Republicancontrolled Legislature capped months of turmoil by overriding the governor's veto of a bill that would undo some of his tax
cuts and raise $ 1.2 billion over two years.
The discount rate will do something to help here, but only a
cut in
Fed funds will get the speculative juices going, for good and for ill.
Off of
Fed funds options, the odds of no change are 10 %, odds of a 25 basis point
cut are 70 %, and the odds of a 50 basis point
cut are 20 %.
My view of the
Fed is that they want to drag their feet, because they see inflation rising, so even if
Fed funds futures indicate a 75 basis point
cut, my current view indicates 50 as more likely, again, with language in the statement that indicates even - handed risks.
Regarding
Fed funds, it looks like they will
cut 25 basis points on 4/30, but make noises that they are getting close to being done.
In August 2007 the Board of Governors
cut the primary discount rate from 6.25 % to 5.75 %, reducing the spread over the
fed funds rate from 1 percentage point to 0.5, where it currently sits (from early 2008 to 2010 the spread was 0.25 percentage points).
When the Federal Reserve started
cutting its benchmark
Fed Funds Rate, savings account rates began suffering.
The
Fed's attention is now directed at establishing a safety margin with the
Fed funds rate well above zero so that it can
cut rates when the next recession arrives.
In 1998, the
Fed orchestrated a bailout of the infamous hedge
fund, Long - Term Capital Management, and sharply
cut interest rates.
A posting on the Inman News blog indicates that National Association of Home Builders expects more short - term rate
cuts by the
Fed this year, with quarter - point
cuts in the federal
funds rate at the
Fed's Oct. 31 and Dec. 11 meetings.
The NY
Fed has left
Fed funds on average 6 basis points higher than the target since the emergency
cut.
Altogether, inflows into these
funds surpassed $ 1.1 trillion since the end of 2008 when the
Fed cut rates to zero.
Most of the pressure is toward a lower
Fed funds target rate, but given that the
Fed has sterilized their prior
cuts, I don't see what great good it will do.
Low Quality's Round Trip Bad News Bulls Stock Performance Following the Recognition of Recession The Beginning of the Middle Experimenting with the Market's Median Valuation Anchored Inflation Expectations and the Expected Misery Index Consumer Spending Break - Down Recessions and the Duration of Bad News Price - to - Sales Ratio May Prove Valuable International Markets Show Important Divergences Fixed Investment and the Technology Rally Global Yield Curves, Earnings Growth, and Sector Returns Recessions and Stock Prices Adjusting P / E Ratios for the Market Cycle Private Equity and Market Valuation Must Stocks Rise Following a
Cut in the
Fed Funds Rate?
Nice, and toss in the commentary that sound like the
Fed is taking signals from the TIPS market on inflation, as well as the commentary in the minutes that some members were leaning toward
cuts in the
Fed funds rate.
As it stands now, I don't put much credibility in a
Fed funds rate
cut.
So, that leaves me at a 1 %
cut in
Fed funds tomorrow, with a parallel
cut in the now - meaningful discount rate.
After initial confrontations with environmental groups fighting a wave of shrimp farm development that was damaging coastal ecosystems from Asia to the Americas, Thornton, together with Tim Smith, a biologist working for the World Wildlife
Fund, refined methods for controlling
feed and water that dramatically
cut pollution.
The fight must be taken to Congress, where irate taxpayers must convince House members to tie the purse strings and
cut all
funding to the UN, and to the Fedgov agencies that are
feeding the UN beast.
Working with ClimateCare, organisations can
fund programmes to quickly and cost effectively
cut indoor air pollution by making solar power, efficient stoves and gravity
fed water filters affordable for families — reducing the risk of pneumonia, diarrhoea and other diseases.
At the NAR Midwinter Business Meeting in Honolulu, Tuccillo told attendees he wasn't surprised by the
Fed's decision to
cut the federal
funds rate by a quarter point on Jan. 31.