Fed Cuts Rates To ZERO. Yes, Zero. 0%.
The Federal Open Market Committee today established a target range of zero to 0.25% for its fed funds rate. This, as you might imagine, is unprecedented.
The reaction on Wall Street was jubilant.
From Bloomberg:
“The Fed is sending a message that it will print money to an unlimited extent until it starts to see the economy expanding,” William Poole, former president of the St. Louis Fed and now a senior fellow at the Cato Institute in Washington, said in an interview with Bloomberg Television.
The Fed Goes To Zero [WSJ]
Fed Cuts Rate to as Low as Zero, Will Use All Tools (Update2) [Bloomberg]
(Photo: Spirit365 )
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Comments:
wow, just wow.
Didn't Japan do this in the 80's? How this be any good??
Won't this lead to massive inflation?
the only reasonable move now is to start paying interest on the money you lend out
Isn't that what Zimbanwe is doing? I seem to recall them just announcing that they are going to be printing $500,000,000 notes..... Wonder who the Treasury will decide to put on the new big notes?!
The country is officially f**ked
It will print money to and unlimited extent?
That sounds like Zimbabwe and it worked out so well there.
There are a lot of historical instances in which a country that pell-mell and willy-nilly printed money saved the day, so to speak.
:presses earbud, listens for a moment:
Oh wait, my producer is correcting me - apparently that's never happened. What? $200 loaf of bread? Crack open each other's heads and feast on the goo inside?
@dcarrington01: the past 20some bills that have passed through my wallet (5s, 10s, and 20s) have all been crispy brand new.... not a good sign.
@Mr. Guy:
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha....
I think I might be sick.
The up side is that the Euro is rapidly approaching 1-1 parity with the Bush Peso just in time for my trip to France! The global economy may be fucked, but I'll be living large.
>it will print money to an unlimited extent until it starts to
>see the economy expanding
The beatings will continue until morale improves.
No, Zimbabwe just prints money.
The problem is you're not allowed to do that unless you're Nintendo ^_^.
@El_Fez: Better recheck those figures, Chief.
The Euro dropped to around $1.25 for a couple of weeks, but has been rallying like crazy over the last week or so. It's back up to $1.40 now. Not quite as bad as the $1.60 it was when this craziness all started, but still...
Ladies and Gentlemen... we are about to begin a quick decent... buckle up.
hmm... the next few weeks might be a good time to refinance any outstanding debts you might be carrying.
"See, I do things. I'm like a nation chasing fiscal solvency! I wouldn't know what to do with the economy if it improved!" - Ben Bernanke & The Fed
doesn't really mean anything as long as banks continue shutting the american people out of the loop. This, just like the bailout will fail to trickle down past the billionaire boys club.
And you all laughed at me when I was planting my money tree.
Hooray! Tis a good time to be house hunting!
sweet. we'll be like zimbabwe soon!
@chocogray: Yeah, I keep looking around for someone to tell me why this would be good for me, are my credit card APRs going to go down? Don't think so. Seems to me like the only thing that will happen to people like me is that my savings account will lower the interest rate another .25% like they did a few months ago and I was so happy with my ING 3% APR no minimum balance account :(
@m4ximusprim3: It's a good time to be first house hunting. Not a good time to be selling an existent house.
Banks are likely to stop offering interest on savings accounts and start charging you for keeping your money there.
So how much longer until people start paying the Monopoly board game using real US currency?
Can anyone explain this for the dummies out there? What does this mean, if anything, for mortgage rates?
I'm going to my bunker, so you all in 50 years or so when the radiation clears.
Well, those of us in debt will enjoy the inflation. So I owe you $50,000 do I, Mr. loan officer? That's fine! I have a $1,000,000 bill right here! No, keep the change!
See you guys on the bread lines with my wheelbarrow full of 100s.
Headline this time, two months from now.... Fed increases prime rate to stave off hyperinflation.
@rainmkr: They did it in the late 90s and early 00s, they are only now getting out of their resession.
I must have seriously failed my economics course....
"it will print money to an unlimited extent" Just screams bad.
@Mr. Guy: That is the absolute best first comment ever. I salute you, sir! Please help yourself to a free internet.
@Matthew Leibel: That's akin to a cancer patient asking about Chemo "Won't this inhibit my immune system?" Yes, low or zero interest rates are inflationary, and if we had any inflation to worry about, it would be a bad idea, but since what we have happening right now is deflation, I doubt that worrying about inflation is at the top of the Fed's to-do list.
This is also why the Fed meets on a quarterly (or lately, more often) basis to set target rates, so that (in theory) they can react quickly if they see serious signs of inflation.
@k6richar: Yeah, cause Zimbabwe and the United States are otherwise so much alike in their economies.
I'm off to spend all my savings so I have stuff to barter with later.
SAAAAVED BY ZEEEEEROOOOOO