Fed Raises Discount Rate; Fed Funds Rate Unchanged (to 0.75% from 0.5%)

FOXNEWS ^ | 2/18/2010 | Tom Granahan

[TSgt]

The Federal Reserve on Thursday raised its discount rate to 0.75% from 0.5%, an effort to return its lending facilities to more normalized levels.

The Fed said the move, along with other recent modifications to its credit programs, does not signal a change in its outlook for the economy or for monetary policy, and the more important fed funds rate remains in its range of 0% to 0.25%.

The Fed usually changes the discount rate at the same time it does the fed funds rate, but after the unprecedented steps taken to combat the financial crisis, the Fed is eager to start bringing rates back to more traditional levels, and Thursday’s move is a start.

Excerpt

[SlowBoat407]

Here we go...

[TSgt]

Federal Reserve Raises Discount Rate to 0.75% from 0.5%

[Mengerian]

Gold prices should drop considerably in the months ahead. Time to buy.

[Incorrigible]

And so it begins.

[b4its2late]

Interesting. Not even during a regular meeting.

[C19fan]

Signal of things to come but watch for the Fed Funds rate and when the Fed starts unwinding its bloated balance sheet; ie stop financing Zero’s deficits.

[DeusExMachina05]

LOL, here comes the ride...two years from now hyperinflation.

[DuncanWaring]

DJIA up another 100 tomorrow!!!

[Moonman62]

Gold prices should drop considerably in the months ahead. Time to buy.

Time to buy what?

[b4its2late]

Yeah, funny how they waited till the markets closed huh? Wonder what the overseas ones are doing?

[Moonman62]

The Fed has to do something. They don’t want to look like they are a bunch of do nothings. It’s not like the good old days when they could slam down a healthy economy just for the heck of it.

[clintonh8r]

ruh-roh....

[OldDeckHand]

"Time to buy what?"

I'm going to go with ammunition, maybe some MREs too.

[Fishface]

Raising rates into an environment with zero liquidity.

Theoretically, there should be a ton of liquidity, but there is none.

This is going to be a disaster.

[Ravi]

related to PPI report earlier today?

[Moonman62]

LOL, here comes the ride...two years from now hyperinflation.

And you draw your conclusion from what -- past instances of hyperinflation?

[clintonh8r]

Time to buy what?

$$. And ammo. Always time to buy ammo.

[OldDeckHand]

"Yeah, funny how they waited till the markets closed huh? Wonder what the overseas ones are doing?"

Are they open yet? They may not open for a few more hours, IIRC.

[Uncle Miltie]

Thank goodness.

The rate change will probably accelerate actual business action as people begin to understand the Fed won’t just inflate us forever.

I’m relieved. At least loose monetary policy won’t continue forever. That’s what this is: a signal that you can’t merely print your way out of a recession.