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50, 75, 100?


               
2022 Jun 13, 5:04am   58,687 views  329 comments

by Al_Sharpton_for_President   follow (6)  

This "relentlessly aggressive" stance could include raising interest rates by 0.75% on Wednesday, a move economists at Barclays said Friday is now their baseline expectation.

"Historically, the US central bank has avoided surprising markets – say, by going 75bp when it is not priced in," Barclays economists led by Jonathan Millar said in a note to clients published Friday.

"But next week, we feel, is likely to be an exception."

https://finance.yahoo.com/news/inflation-puts-pressure-on-powell-what-to-know-this-week-162615319.html

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325   Misc   2025 Sep 17, 11:56pm  

If the Fed doesn't lower rates dramatically, expect to see 2-5% daily price swings between major currency pairs. It won't be the US implementing capital controls, but a shit ton of foreign countries will freak the fuck out.
326   AD   2025 Sep 18, 12:19am  

Misc says

If the Fed doesn't lower rates dramatically, expect to see 2-5% daily price swings between major currency pairs. It won't be the US implementing capital controls, but a shit ton of foreign countries will freak the fuck out.


Money markets at Schwab will still pay whatever the Fed Funds rate is now (I suspect about 4.1%).

This will continue to attract foreign money as it safely pays a real or inflation adjusted annual return of at least 1.5%.

Banks charging prime rate of about 7.25% for money lent; that money comes from money market fund deposits earning 4.0%. Let alone the banks make money off loan origination fees.
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327   Misc   2025 Sep 18, 12:23am  

AD says


Banks charging prime rate of about 7.25% for money lent; that money comes from money market fund deposits earning 4.0%. Let alone the banks make money off loan origination fees.


Nope, those loans come from deposits and CDs. Money market accounts can only invest in very short term investments that are highly rated. Mostly US government paper.
328   AmenCorner_AntiPanican   2025 Sep 18, 11:49am  

MolotovCocktail says


Yeah? Home prices still have to drop.


HeadSet says


Yes, but lowering rates increases house prices. For the same mortgage payment, it is better to have a low price and a high rate as that allows more of any extra payments to go to paying down principle. Also, higher prices mean higher assessments and thus higher taxes. The solution to affordability is not "affordable rates," it is the prices coming down from the lofty highs caused by the ZIRP era.


Yep, the problem is the price, not the rate. The $200-400/mo. savings from a 1-2% rate cut does not begin to cover the added 30-40% increase in maintenance/repairs, insurance, property taxes, etc.

The way to lower insurance, property tax bills, make housing affordable, etc. is to pound the price down.

I predict a slight uptick in sales, followed by a continued buyer's strike.

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