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

[politicket]

I agree it’s tiny at the current amount of lending, but I also think it’s foolish since credit is still frozen for all intents and purposes.

[blam]

PPI Shows Inflation Way Higher Than Anticipated, Jobless Claims Take Big Bump Up

[Toddsterpatriot]

If no one is borrowing from the window, raising the rate 0.25% isn't going to kill the non-existent borrowing at the window.

[politicket]

If no one is borrowing from the window, raising the rate 0.25% isn't going to kill the non-existent borrowing at the window.

That's true, but it's sure not doing anything to help out the frozen credit situation.

[blam]

Fed Changes Terms In Front of OpEx (Denninger)

[Forgiven_Sinner]

I expect a big hit on Wallstreet. -100 at least tomorrow.

[Red in Blue PA]

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

Agree 100% with the ammunition.

But MRE's have a shelf life of 3 to 5 years. #10 cans have a shelf life of 25 to 30 years.

[wardaddy]

oh great...the economy is slow as molasses and the baNKS WON’T LEND CRAP AND THE FED ACTS LIKE THERE IS TOO MUCH MONEY OUT THERE

EFFING a...THEY PRINTED IT FOR THEMSELVES

BASTARDS

[Forgiven_Sinner]

Since we’re not in an inflationary environment yet, but rather a deflationary one, I think this was done so we can sell T-bills to the Chinese.

[Toddsterpatriot]

Yeah, raising the rate doesn't help the frozen credit situation.

Raising the rate wasn't meant to help the frozen credit situation.

[redgolum]

They should have raised the rates years ago. Credit was way to loose, and should have been slowed down.

The problem now isn’t that you can’t get a loan, it is that no one trusts the other guy.

[redgolum]

Me also.

Was glad to see it, I use those fake cards as book marks and was running low.

[rbmillerjr]

Do you anticipate that this is a “first move” toward more tightening.

If they would have done this within the meeting notes I don’t think it would have been that big of a deal, but something happened, apparently, between then and now.

Doing it at this odd time and after the close puts uncertainty into the markets imo.

[Toddsterpatriot]

Do you anticipate that this is a “first move” toward more tightening.

Yes. Their next move will be up, not down. LOL!

[rbmillerjr]

You think that is inconsequential to the markets?

Gotcha.

[Toddsterpatriot]

You think that is inconsequential to the markets?

Where did I say that?

[GeronL]

Didn’t the govt predict 16% inflation this year??

Stick with gold

[Blue Turtle]

and remember....this is all being done on purpose.

[Toddsterpatriot]

Didn’t the govt predict 16% inflation this year??

No.

[foxfield]

This image from the Drudge Report say it all: