[SlowBoat407]

Here we go...

[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]

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....

[Ravi]

related to PPI report earlier today?

[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.

[Toddsterpatriot]

We’re doomed!!!

[sanchmo]

Interesting.

In real eocnomic terms, this doesn't have much of an actual mathematical impact, since there is very little borrowing going on at the discount window anyway. When the M1 multiplier is below 1, there isn't much need for banks to go to the discount window. After all, why would banks borrow at 5% when (a) they have massive excess reserves and (b) they are getting paid interest to keep the reserves sitting around? It seems like the combination of Fed balance sheet expansion & interest on reserves was intended from the start to allow deleveraging to take its course across the entire economy while still guaranteeing banks some level of risk-free cash-flow - in other words, not a Friedman helicopter drop but a Bernanke cruise-missile aimed at the balance sheet of financial institutions.

The next week or so will be all about market perception. PPI was higher than expected today but not extraordinary, and the especially high crude goods segment can be noisy, so it doesn't necessarily mean a big trend by itself, although CPI might reinforce it tomorrow. On the other hand, the multiplier hit another record low recently, M2 & MZM have been flat & somewhat down, and M1 is threatening to turn lower.

[uscabjd]

What effect, if any, on mortgage rates?

[101voodoo]

READ THIS AND TAKE NOTE OF THE HAPPY FACE THEY PUT ON THIS. IF THEY MENTIONED IT ONCE THEY MENIONED IT 3 TIMES, HOW THIS WILL IN NO WAY EFFECT INDIVIDUAL BORROWING COST, HOW THE ECONOMY IS RECOVERING (THAT AT LEAST TWICE)THIS OBVIOUSLY CAME RIGHT FROM THE WHITE HOUSE TO YAHOO. ************************************************************

Fed bumps up rate banks pay for emergency loans Fed raises banks' emergency-loan rate to 0.75 pct; won't directly affect consumer borrowing

"The central bank said the action should not be viewed as a signal that it will soon boost interest rates for consumers and businesses."

"The Fed did extraordinary things from keeping the economy imploding during the crisis," he said. "Now that that danger is gone, the Fed can take away some of those supports."

"The economy is growing again, and financial conditions have improved. But unemployment is still near double digits, and demand for loans remains weak. Many ordinary Americans and small businesses have found it difficult to borrow."

http://finance.yahoo.com/news/Fed-bumps-up-rate-banks-pay-apf-4141548450.html?x=0&.v=3

[blam]

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

[blam]

Fed Changes Terms In Front of OpEx (Denninger)

[Forgiven_Sinner]

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

[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.