Posted on 11/01/2015 4:18:26 PM PST by celmak
RUSH: This is Bill in Warner Robins, Georgia. Great to have you on the program, sir. Hello.
CALLER: Rush, quantitative easing and the threat of stopping it or tapering off, I think, is the reason why Republicans are afraid to have a government shutdown. I think either explicitly or tacitly, the Republicans have been told that the Fed would stop quantitative easing, 'cause it's the quickest and most direct way to go ahead and illustrate the impact of the federal government on the citizenry if you have the stock market takes a major hit. That's the only reason why I can think of this.
(Excerpt) Read more at rushlimbaugh.com ...
VERY interesting read; I remember that moment.
Fed policy is maintaining 0 to 25 basis points for one reason and one reason only. Stimulus. I have no idea what Todd’s point is.
Yes I do. Do you know why it affects markets when it is raised or lowered?
More to the point, do you deny the effect of the fed funds rate on broader interest rates and thus the economy as a whole?
What is it?
Do you know why it affects markets when it is raised or lowered?
Currently, it would be strictly psychological.
The FFR is the short term interest rate banks and credit unions charge each other when trading reserves.
Why does the FFR affect interest rates generally in real terms?
What is the spread between what banks pay depositors and what they lend money for currently?
Does ZIRP affect either of the above?
Wow, up until this, I thought I was learning something from you.
Interesting article nicely describing stealth QE. I had read of it before on Zero Hedge but not is such great detail. Thanks.
Keeping the balance sheet steady is not QE.
Of course it is. The Fed is supposed to be reducing their obscene balance.
Yeah, it'll be nice when they do that. Until then, keeping the sheet steady is not QE.
If the Fed raised the Fed Funds rate to 0.50% tomorrow, what would be the real world impact? Would it decrease loan volume? Why?
The FED doesn't even have to raise rates to get a reaction. Heck, remember the last reaction that happened when the FED said it was thinking about it? That was in mid-August and the DOW went from around 17,500 to around 15,500 within two weeks!
Sounds like a psychological reaction......
Yep, and that's all that's needed from the FED to make people think that a downturn in the stock market is caused by the election of a Republican President; and the DemoRATs best friend come November 2016 is the FED.
People here are going to have to explain to the ignorant what is coming .
If a Republican is elected and the Fed suddenly boosts interest rates, to cause the market to go down, why would that help the Dems?
Why did they blame Reagan in 1982 causing the House to lose 26 Republican seats that year, and Bush 41 in 1990 causing the House to lose 8 Republican seats that year? It would have worked with Bush 43 if it hadn't been for the 9/11 attack, or do you NOT remember the attacks they got for the market's downturn during those times.
The FED may have not raised interest rates in 1982 and 1990, but they were in control and played different games at that time that caused the market to go down (or at the very least, did nothing to try to stop the downturn). Don't you remember the headlines at those times, or are you too young to remember?
You seem intelligent, so you must know that these psychological games work.
The Fed had to boost overnight rates to 20% in 1981 to finally stop double digit, runaway inflation.
It would have worked with Bush 43 if it hadn't been for the 9/11 attack
They were already cutting rates when he took office. They were 5.5% when he took office and had dropped to 3.5% before 9/11.
Currently, inflation is minimal. GDP is weak. There's no reason to boost rates so much as to cause the economy to tank.
And if they did, the Republican President would rightly attack them for it. And correctly pin the blame on them.
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