Where The Fed Sits In One Chart (Taylor Rule Hints At Target Rate Being 8.80% Instead Of 0.25%)

With The Federal Reserve leaving its target rate at 0.25%, but hinting at a tapering (slowdown) of asset purchases, I thought it would be good to present where The Fed sits at the moment.

You can see the rise in the effective Fed Funds rate from 2016 to early 2020, then KABOOM! COVID struck, the effective Fed Funds rate crashed while The Fed dramatically increased their purchases of Treasuries and Agency MBS. Both Treasury and Agency MBS purchases are projected to decline by mid-2022. The Fed’s target rate (purple line) is project to rise to 1% after 2023.

Where SHOULD The Fed Funds Target rate be? How about 8.80% instead of 0.25%.

So we still have over-stimulypto with The Fed projected to raise rates at a snail’s pace.

Face it, Wall Street wants interest rates low, even if inflation burns out of control.

2 thoughts on “Where The Fed Sits In One Chart (Taylor Rule Hints At Target Rate Being 8.80% Instead Of 0.25%)

  1. I believe this is one of the such a lot important
    information for me. And i’m happy studying your article.
    However wanna observation on few general issues, The website style is perfect, the articles is truly excellent : D.
    Good process, cheers

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.