Yellen, You Have A Problem: The "Rate Hike Corridor" Just Broke (rate hike down 50%)

ZeroHedge ^ | 12/31/2015 | Tyler Durden

[GilGil]

... the Fed Funds rate just tumbled to 0.12%, far below the required 0.25% floor set by the Fed, and down 23 bps from the effective 0.35% Fed Funds rate set yesterday, confirming that indeed the rate hike corridor can and has been breached at least once, and just two weeks into the Fed's rate hike experiment.

[vpintheak]

If you think unemployment is 5%, I have a bridge to sell you. Real numbers make it more like 22%.

[Pining_4_TX]

The problem with Zero Hedge is that they have been forecasting imminent disaster for years now. They are quite the collection of gloomy, angry, bitter people. Perhaps some day they will be right, but in the meantime, they must lead awfully depressing lives while waiting for the apocalypse.

[moovova]

That’s what I was afraid of.

[virgil]

Who do people vote for when the SHTF? 2016 is an election year. They don’t care if granny’s retirement account is wiped out, and how many get hurt so that they can be in power.

[Flick Lives]

It’s like putting the brakes on a car that is not moving, but the Fed is pretending it’s moving (”bruuummm, bbbrruuummm!”).

[buckalfa]

"If the FED set the rate at .25, are they having to go lower to get banks to borrow from them and trying to keep it quiet?"

Large corporations are sitting on huge amounts of cash on their balance sheets, Couple thus with a lethargic economy at best, why would they borrow?

[sopwith]

I think 2016 is going to be a bit of a bumpy ride.

[SkyPilot]

A few days after the interest rate was raised to .25%, the hanky panky in the background has dropped the rate to .12% which means the economy is already in trouble because it cannot withstand the rate hike.

A Wall Street analyst interviewd in CNBC on Friday afternoon publically called for the Fed to reduce the rate to ZERO!

[GilGil]

This article is not about gloomy disaster. It simply points out that the .25% interest hike is cut by 50% already to .12%.

If it gets back up to .25% then this was a blip.

If not then it means the economy is frozen.

[butlerweave]

Why is Yellen always sitting down or is she really standing up

[Toddsterpatriot]

If the FED set the rate at .25, are they having to go lower to get banks to borrow from them and trying to keep it quiet?

No. Banks aren't borrowing from the Fed. They're lending the Fed almost $2.5 trillion.

[Toddsterpatriot]

I was not aware that the gov't assumes that once your unemployment benefits run out you are considered fully employed again.

That's not the case. When your benefits run out you are still considered unemployed, as long as you are still looking.

[Georgia Girl 2]

For purposes of the “5%” unemployment rate the govt considers you employed after your drop off the unemployment rolls because they only count the ones on unemployment for their distorted unemployment rate. Its all kabuki theatre.

[amihow]

Could. You pleease describe the reality?

[Toddsterpatriot]

For purposes of the "5%" unemployment rate the govt considers you employed after your drop off the unemployment rolls

No they don't.

[Georgia Girl 2]

Let me rephrase. They “assume” you are employed after you drop off as they no longer count you.

[Toddsterpatriot]

"they only count the ones on unemployment for their distorted unemployment rate"

Also wrong.

Continued claims are a bit under 2.2 million. Way below the current unemployment rate.

[Toddsterpatriot]

Let me rephrase. No they really don't.

[Leaning Right]

My theory: The Fed’s raised the interest rate just so they can lower it a month or so before the presidential election next year.

That would give the stock market a temporary boost, making many folks feel better. And that would favor the establishment candidate (probably Hillary).

[Georgia Girl 2]

If everyone dropped off the unemployment rolls the govt would say there is zero unemployment.