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What Does Today’s “Rate Hike” Mean?
Paul Craig Roberts
The Federal Reserve raised the interbank borrowing rate today by one quarter of one percent or 25 basis points. Readers are asking, “what does that mean?”
Richard Werner – an economics professor and the creator of quantitative easing – says that it’s a myth that interest rates drive the level of economic activity. The data shows that the opposite is true: rates lag the economy.
Economics prof Steve Keen – who called the Great Recession before it happened – points out today in Forbes that the Fed’s rate dashboard is missing crucial instrumentation:
On Tuesday, we brought you Bloomberg’s top 10 “worst case scenarios” for 2016. The list, compiled by polling "dozens of former and current diplomats, geopolitical strategists, security consultants, and economists" included everything from devastating cyber attacks by Iranian and Russian hackers to a military coup in China.
They even threw in a Trump victory in the national elections for good measure.
Update: The SEC Folds:
As Bloomberg reports, Third Avenue Management LLC received approval from U.S. regulators to temporarily suspend redemptions from its $788.5 million high-yield bond fund.
Someone forgot to give the banks the memo that the Fed's first rate hike since 2006 was supposed to, at least on paper, benefit the savers of America and not so much the, well, banks.. Because the ink hadn't even dried on the Fed's statement and one after another banks revealed that they would promptly boost their Prime lending rate from the current benchmark of 3.25% to the new Fed Funds-implied prime rate of 3.50%.