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

#bubble, #inflation, @MetreSteven @JeffSnider_AIP @DiMartinoBooth @bondstrategist @RaoulGMI @LukeGromen @dlacalle_IA @EconguyRosie @profplum99 @SantiagoAuFund @biancoresearch @pboockvar @SriKGlobal, Agency MBS, Bank of England, Bank of Japan, Banking, Bernanke, Credit, Economy, Fed, Freddie Mac, Housing, Inflation, Mortgage, Pension, Powell, Treasuries, Treasury, Uncategorized, Yellen, Yield Curve 1 Minute

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.

Published by confoundedinterest17

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

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