posted on 03 February 2016
by Michael Haltman
The Federal Reserve, after raising its benchmark fed funds rate 0.25% in December 2015, last week left rates unchanged!
The December increase was implemented despite inflation remaining well below the Fed's target rate of 2% and in the face of an economic recovery that could be, at best, termed tepid.
At the time some speculated that the Fed needed to raise rates so that they would have the ability to lower them again should the economy weaken. Still others thought that to retain any credibility they needed to make a move.
Neither one of those could be called solid reasoning when making decisions impacting the U.S. economy.
And since the rate hike this chart depicts the counterintuitive track of 2-year treasury note yields courtesy of treasury.gov...
And courtesy of finance.Yahoo.com, this is the one month chart of the S&P 500...
Federal Reserve Credibility?
So do we feel that the Fed as an institution with HUGE responsibilities, has a firm grasp on accomplishing its mandate?
Janet Yellen and the Fed
In September 2015 I wrote the following article that opined over the fact that the Federal Reserve, in effect the arbiter of the global financial system, is run by academicians with little to no actual experience with business.
I thought that after yesterday's statement it was worth repeating...
What is it that can and often will separate successful businessmen and investors from those who may not be?
'Born in Brooklyn, New York, in 1946, Janet Yellen
Read the rest of the article at the Hallmark Abstract Service blog here.
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