We were expecting 100 pips, but the Fed hauled off with a 75 basis point rate cut today. Emo Bernanke, all about the cutting.
LOLFED » HSBC: Fed To Cut Target Rate To Zero // Oct 20, 2008 at 7:42 am
[...] I am still on my couch: HSBC forecasts three quarters of negative growth in the United States and Emo Bernanke cutting the target rate to zero much sooner rather than later. Add to: [...]
self-evident » Musings for a Friday afternoon // Nov 21, 2008 at 7:48 pm
[...] You can also see yesterday’s effects in the Fed’s daily statistical release. As of Nov 20, the 5-year (nominal) Treasury yielded 1.94%, while the 5-year TIPS yielded 3.73%, for a spread of negative 1.79%. I am reasonably certain this is a record. I am not as clever as the Cleveland Fed; I cannot do adjustments for liquidity and the like… But I can say, to a first approximation, that this represents efficient pricing only if inflation averages negative 1.79% for the next five years. And I know that this is the sort of thing that makes central bankers sad. [...]
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