Economists and investors alike are speculating that the Fed could announce a second hike to the discount rate, after increasing its spread over the fed funds target rate to 50bps–compared to its historical level of 100bps. Some investors, despite Fed comments to the contrary, perceived the move as prelude to more significant tightening, be […]
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discount rate
Chairman Bernanke recently indicated that the Fed was considering an increase in the discount rate, which tends to mean it is going to happen and soon. It happened, the Fed this evening announced an increase in the discount rate to 0.75% from 0.50%, moving it closer to its pre-crisis spread to the Fed Funds Rate […]
*Sorry for the delay in posting we were experiencing serious computer issues One of the questions on everybodys’ minds is how high would inflation need to go before the Fed would reconsider any further rate cuts. During the recent months’ we have seen increasing down side risks to the US growth forecast, while at the […]
This mornings GDP reading of +0.6% will outweigh the positive ADP number and lead to an additional cut of 50bps at today’s meeting. However, if the Fed were to cut by only 25bps we would expect a large sell-off in the US and global EQ markets; leading to in our opinion to another good buying […]