Goldtent TA Paradise

INTEREST RATES ( BASIS 10 YR YIELDS)

1. Chartsmaster says:

   October 13, 2022 - 9:59 am at 9:59 am

   The clueless morons at the Federal Reserve go from holding interest rates artificially at zero for years, creating the biggest bubble in everything, and now they go crazy in the other direction basically overnite. Abolish the FED. They are schizophrenic imbeciles.

   • traderscott says:

     October 13, 2022 - 10:19 am at 10:19 am

     The FED follows the market. If the market says rates should be zero, then that is what the Fed does. If the market says rates should be higher (due to supply and demand), then the Fed raises rates. The notion that the Fed set interest rates is a widely held myth. When I say the “market”, I am talking about the auction of short term T-bills of 1-3 months. Rates are set at this auction at the level needed to entice buyers to buy.

     • pedro_deleon says:

       October 13, 2022 - 10:34 am at 10:34 am

       ts is correct. The Fed is more of a mirage in terms of FOMC POLICY making.
       BUT … the (NY) Fed is also the 800 lb gorilla in the bond market (“that tells the Fed what to do”) with all its pomo’s etc. Its been buying T’s and MBS’s which is how its balance sheet got to where it is.
       So … lets start by shuttering the NY Fed.
       Which is to say, lets tell Congress they have to adopt a Balanced Budget.

       Years ago, I ran across an old article that claimed the original 1913 Fed charter limited the Fed to purchasing short term corporate debt (at a deep discount). No Treasuries. That changed ahead of WWI. Time to change it back.