-
Ever wanted an RSS feed of all your favorite gaming news sites? Go check out our new Gaming Headlines feed! Read more about it here.
-
We have made minor adjustments to how the search bar works on ResetEra. You can read about the changes here.
US Federal Reserve just slashed interest rates to 0%
- Thread starter Deleted member 431
- Start date
No. Reserve ratios are not the backstop of prudential regulation and the Fed getting rid of them is just bringing it into line with many other central banks.
my company has been complaining about the low interest rates killing them for years now. And now at zero? im doomed.
It's a bit of a commitment, but for anyone who wants to understand these sorts of moves, I recommend videos from Khan Academy:
www.khanacademy.org
Money, banking and central banks | Khan Academy
Learn for free about math, art, computer programming, economics, physics, chemistry, biology, medicine, finance, history, and more. Khan Academy is a nonprofit with the mission of providing a free, world-class education for anyone, anywhere.
Overnight lending rates have been brought to near-zero to help the banks. With the massive rate cuts that were just done, this literally imploded many banks balance sheets as they were expecting a rate of return much higher than the .75% drop.
This was done to prevent a one-two punch of businesses going poof, and then your bank going poof.
This was done to prevent a one-two punch of businesses going poof, and then your bank going poof.
It's a bit of a commitment, but for anyone who wants to understand these sorts of moves, I recommend videos from Khan Academy:
Money, banking and central banks | Khan Academy
Learn for free about math, art, computer programming, economics, physics, chemistry, biology, medicine, finance, history, and more. Khan Academy is a nonprofit with the mission of providing a free, world-class education for anyone, anywhere.
bookmarking. thanks.
This will accomplish fuck all. The problem is, nobody is going to be working and nobody is going to be spending, and rate cuts aren't going to be an incentive when people can't even go to work. We need a fiscal stimulus in the form of direct cash payments and sick leave subsidies if we're going to get through this without suffering a very deep recession
This is the BANK rate that was slashed. Your treasury rates, and prime for now are unchanged.
Aww gotcha. I was reading that as the insurable percentage.
Low interest rates benefit Mr. Emoluments and his porttolio
On my grip - This interest rate cut may be a great thing. It may do wonders for the economy and we'll get some idea Monday morning onwards.
I have no issue with the policy or the decision in a vacuum - only the recent (literally yesterday when Trump was cornered on Live TV and asked why he hadn't gotten rid of Powell for not lowering interest rates BEFORE Coronavirus) and less recent (Trump and Powell's entire professional relationship where he has threatened, complained and cajoled Powell And been frudstrated that he can't simply fire him) historical context - which is hugely problematic and begs consideration.
As I've already stated, Powell has shown tremendous resilience and independence so far - and Trump has done everything in his pwoer to pressure Powell to lower interest rates without the slightest concern or understanding of the broader economic impact. It's also - because of that, nowhere near as big a jolt or pressure release as it would have been in a normal Fed situation - it's a huge deal, but a drop to zero from record lows in the first place. And for an economy some have argued has been artificially buoyed in the first place - and argued by reasonable economists rather than doomsayers.
The fact that this extremely fraught and potentially risky decision was made in that context is important to remember. Nowhere have I suggested that this rate decision won't or can't work, or isn't a good idea. Only that it's happening in an exceptionally volatile situation and directly feeds into a demand Trump has made non stop with or without cause.
This might be the best possible decision - but it's a decision made in a preexisting atmosphere of externalities that are not related to the financial crisis at hand. Fed chairmen have ALWAYS been under pressure from administrations but it's usually backroom, behind the scenes, proxy whining or diplomatic outreach - not insulting and inflammatory rhetoric from the president.
We have 30k in savings and 10k in the regular bank account. Savings doesn't really give us any interest regardless so does this have much effect on me/my money? I am looking to refinance the house.
All this means is the big national banks will start pushing out risky loans again and end up needing bailed out. Happened in 2008 and I doubt they learned fuck all. I'm just thankful the bank I work at doesn't change our stance when things like this happen. Hell we actually grew when other banks were going under because we didn't start throwing cash at risky loans
I don't think so. Average people don't get to directly benefit when there are corporations we need to look out for.
You're in a different country.
Some European countries have had negative rates.
Any posters talking about "they said we needed money for M4A" really need to please go through one of those online courses on the fed and monetary policy. Because the Fed doesn't spend money. The fed exists because you can't just print money constantly to pay for massive deficit spending on social programs every year. That leads to massive inflation and potential hyperinflation. Having an independent organization manage this is done because executive and legislative elected officials have a long, storied history of those bad monetary policy management behaviors when given the opportunity.
However, the Fed is basically out of options. They've done all they can, it's on congress to get emergency spending bills in place.
However, the Fed is basically out of options. They've done all they can, it's on congress to get emergency spending bills in place.
This has nothing to do with the laughable interest they offer with their checking/savings accounts. If you havent refi and your mortgage interest is above 4%? Yes, do it now.
Mortgage rate rise increases pressure for Fed intervention
Traders say liquidity in market for bonds backed by American home loans is drying up
www.ft.com
I'm hearing rates have been going up anyway. Are we sure they'll drop? Do banks really want to take more risk? They don't HAVE to lend.
Mortgage rate rise increases pressure for Fed intervention
Traders say liquidity in market for bonds backed by American home loans is drying up
I'm hearing rates have been going up anyway. Are we sure they'll drop? Do banks really want to take more risk? They don't HAVE to lend.
This is primarily for businesses, this is almost the exact same shit as 2008 the only reason we got into mass trouble back then was banks didn't care and started throwing it around like Monopoly money and had to be bailed out. Hoping with the string period we've had they avoid that this go around.
Why lots of people are acting like the sky is falling and everything is done I don't know. The biggest wildcard in all of this is the virus itself, if we start getting warm temps and the virus can't survive warm temps all this could be moot
Bruceleeroy Can I ask, my parents (in Ca) are under contract selling their small business (auto service) + land that'll close early May. Is this better for the buyer trying to get a loan or is there a chance with everything going that it would be better for them to break the contract?
They barely weathered 08 and are almost retired. I'm a bit worried that everything is falling apart and will ruin their retirement plans.
They barely weathered 08 and are almost retired. I'm a bit worried that everything is falling apart and will ruin their retirement plans.
We're still not in an official recession. What other wiggle room will we have if we do have a recession?
Warm weather will not save us, that has been debunked for a while.
I know all of you were waiting with bated breath on what would happen this morning. Tried to cover all bases but if anything is confusing just PM or hit me up.
sigh being a non-citizen with a student loan sucks all kinds of ass....(because unless I am mistaken you basically need ot be one to do it correct?) shit sucks
But thanks for the info btw. Very good read
