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Thread: 0.25%

  1. #1
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    Interest rates are slashed and then the hyperinflation begins!

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    Why can't the general public borrow from the Fed? I wants a 0.25% interest loan
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    It's not a trap! You can always make more money!
    Also, cancer.

  5. #5

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    A sure sign of Sav-eding. This is fucking nuts.

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    lmao. yay. zero percent interest.

  7. #7
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    When it goes -1% lets all borrow a few billion.
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  8. #8

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    Quote Originally Posted by Carl Ragadamn View Post
    When it goes -1% lets all borrow a few billion.
    Why stop at billion, the feds are operating in trillions these days.

  9. #9

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    The scary thing is that while the target rate was 1% the effective rate has been between 0.10% and 0.50%. They really can't go any lower even with the big headline 75 bp cut.

    http://www.newyorkfed.org/markets/om...dfundsdata.cfm

  10. #10
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    All I want to know is when are the mortgage rates going to go below 4%?

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    Quote Originally Posted by Airius Droc View Post
    All I want to know is when are the mortgage rates going to go below 4%?
    never...the banks have already refused to lower rates anymore in conjunction with the fed rate. Although...alot of ARM mortages are fixed to the fed rate, which means they should be getting lower payments.

  12. #12
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    Why the fuck are they lowering it? They should've been jacking it up above 10%.

  13. #13

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    Quote Originally Posted by Ben Bernanke
    Because central banks conventionally conduct monetary policy by manipulating the short-term nominal interest rate, some observers have concluded that when that key rate stands at or near zero, the central bank has "run out of ammunition"--that is, it no longer has the power to expand aggregate demand and hence economic activity. It is true that once the policy rate has been driven down to zero, a central bank can no longer use its traditional means of stimulating aggregate demand and thus will be operating in less familiar territory. The central bank's inability to use its traditional methods may complicate the policymaking process and introduce uncertainty in the size and timing of the economy's response to policy actions. Hence I agree that the situation is one to be avoided if possible.

    However, a principal message of my talk today is that a central bank whose accustomed policy rate has been forced down to zero has most definitely not run out of ammunition. As I will discuss, a central bank, either alone or in cooperation with other parts of the government, retains considerable power to expand aggregate demand and economic activity even when its accustomed policy rate is at zero. In the remainder of my talk, I will first discuss measures for preventing deflation--the preferable option if feasible. I will then turn to policy measures that the Fed and other government authorities can take if prevention efforts fail and deflation appears to be gaining a foothold in the economy.

    ...

    So what then might the Fed do if its target interest rate, the overnight federal funds rate, fell to zero? One relatively straightforward extension of current procedures would be to try to stimulate spending by lowering rates further out along the Treasury term structure--that is, rates on government bonds of longer maturities. There are at least two ways of bringing down longer-term rates, which are complementary and could be employed separately or in combination. One approach, similar to an action taken in the past couple of years by the Bank of Japan, would be for the Fed to commit to holding the overnight rate at zero for some specified period. Because long-term interest rates represent averages of current and expected future short-term rates, plus a term premium, a commitment to keep short-term rates at zero for some time--if it were credible--would induce a decline in longer-term rates. A more direct method, which I personally prefer, would be for the Fed to begin announcing explicit ceilings for yields on longer-maturity Treasury debt (say, bonds maturing within the next two years). The Fed could enforce these interest-rate ceilings by committing to make unlimited purchases of securities up to two years from maturity at prices consistent with the targeted yields. If this program were successful, not only would yields on medium-term Treasury securities fall, but (because of links operating through expectations of future interest rates) yields on longer-term public and private debt (such as mortgages) would likely fall as well.

    ...

    In practice, the effectiveness of anti-deflation policy could be significantly enhanced by cooperation between the monetary and fiscal authorities. A broad-based tax cut, for example, accommodated by a program of open-market purchases to alleviate any tendency for interest rates to increase, would almost certainly be an effective stimulant to consumption and hence to prices. Even if households decided not to increase consumption but instead re-balanced their portfolios by using their extra cash to acquire real and financial assets, the resulting increase in asset values would lower the cost of capital and improve the balance sheet positions of potential borrowers. A money-financed tax cut is essentially equivalent to Milton Friedman's famous "helicopter drop" of money.
    - http://www.federalreserve.gov/BOARDD...21/default.htm

  14. #14
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    They are almost out of ammo.

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    I don't get you guys.

    You are all financial whizzes who know more than these traders on wall street, yet you are posting on an internet gaming board instead of making gobs of money taking advantage of all these clueless morons on wall street.

    Why is that?

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