Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

[tsetsefly]

Fed slashes key rate to near zero

Ben Bernanke & Co. cite weakness in economy and reduced inflation threat as justification for cutting rates below 1% for first time.


NEW YORK (CNNMoney.com) -- In its latest effort to try and stimulate the U.S. economy, the Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%.
The central bank typically sets a specific target for its federal funds rate instead of a range. The rate had previously been at 1%. Most investors were expecting the Fed to cut rates to either 0.25% or 0.5%
In a statement, the Fed said the U.S. economy, which has officially been in a recession for a year, was in in danger of getting weaker, and that the risk of inflation had decreased "appreciably." Earlier Tuesday, the Labor Department reported that the Consumer Price Index, its key inflation measure, fell by a record 1.7% in November.

http://money.cnn.com/2008/12/16/news...ion=2008121614

Reduced threat of inflation????

How long will they keep this rate is what I am wondering...

[Mega]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

Till O-Be comes in and Ben goes!
Mike

[GRG55]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

http://money.cnn.com/2008/12/16/news...ion=2008121614

Reduced threat of inflation????

How long will they keep this rate is what I am wondering...

We should start a poll FRED.

• < 5 years;
• 5 - 10 years;
• 10 - 15 years;
• > 15 years...

As Finster said, I feel like I'm Japanese...

[metalman]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

We should start a poll FRED.

• < 5 years;
• 5 - 10 years;
• 10 - 15 years;
• > 15 years...

As Finster said, I feel like I'm Japanese...

no friggin way the usa deflates debt japan-style. that ain't how we operate.

[Tulpen]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

This whole FED action is totally meaningless.

Long TBT $39.75

[we_are_toast]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

This whole FED action is totally meaningless.

Long TBT $39.75

The Fed is waving the white flag on interest rates, signaling it's reaching into it's bag of tricks.

Jumped the gun:
Long TBT $40.63

[phirang]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

There's much easier money to be made out there than trading t-notes...

[tsetsefly]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

The Fed is waving the white flag on interest rates, signaling it's reaching into it's bag of tricks.

Jumped the gun:
Long TBT $40.63

what is funny is how investors have reacted with the dollar falling today, its not like this was a surprise move or the fed was not hell bent on causing inflation before this move...

[GRG55]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

no friggin way the usa deflates debt japan-style. that ain't how we operate.

Oh ya, I forgot. The instant gratification society. That means it'll be over quick. Real quick. None of that slow and deliberate Geisha tea ceremony stuff in the U.S. of eh. Eh?

[pwcmba]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

http://www.youtube.com/watch?v=qb5Ii0iIcXo

the video of our lives.

[Chris]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

Long bond futures (March contract) are screaming up to 139 this morning. How long can this continue? (Why does this continue?) :confused:

[Sapiens]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

Borrowing long from Japan is now so passé.

[we_are_toast]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

What happens to money market funds? Won't some of them go negative?
Who's going to keep their money in a fund where you get less than 0% due to fees? Where's this money going to go?

[grapejelly]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

What happens to money market funds? Won't some of them go negative?
Who's going to keep their money in a fund where you get less than 0% due to fees? Where's this money going to go?

they will go negative and won't a lot of folks pull their money? And that could mean a run on MM accounts? I discussed this possibility in another thread and I think it is serious. No way can massive assets be liquidated from MM funds at the same time...and this is a real possibility.

[skurla2000]

Re: Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%

Long bond futures (March contract) are screaming up to 139 this morning. How long can this continue? (Why does this continue?) :confused:

My theory is that T-Bills are a bubble. It's now self-reinforcing due to the word getting out that you can make great money in the worlds "safest" investment...

People are seeing their t-bond portfolios values "pop" 10, 20, 30% in the last two months when everything else is tanking hard! Last chance to save your retirement...

Who wants in? Everyone! Bubble!