Group 21.- Analysis of the Federal Discount Rates over the last 10 years

The federal discount rate is the interest rate at which a financial institution borrows funds directly from the Federal Reserve Bank. In the US, the discount rate, which acts as a reference for commercial banks, is one of the rates that the FED manipulates to control money supply, the second one being the Federal Funds Rate.

 

There are three types of discount rates: The primary credit rate, which is the interest rate charged to most banks, the secondary credit rate, a rate that is charged to small or regional banks and is usually a half point higher than the primary rate, and the seasonal rate which is debited to small community banks that need a temporary boost in funds to  meet the local borrowing needs.

 

The Federal discount rate is set through a democratic process in which the Federal Open Market Committee meets eight times a year to decide whether banks will be able to lend out less or more money. For instance, if the discount rate is high, it is more expensive for banks to borrow funds. Thus, they have less cash to lend out. On the contrary, if the discount rate is low, banks can borrow more funds as they have more cash to lend out, making cheaper to obtain loans from the FED.

 

The FED raises the discount rate when it wants rates to increment, its main goal being to control inflation. This process is called contractionary monetary policy. As the Fed is supposed to regulate money supply, this policy helps to reduce the amount of funds available by limiting lendings. The expansionary monetary policy, on the other hand, is used to stimulate economic growth.

 

 

This article will analyze the Federal Reserve’s discount rates over the last 10 years. It will first examine the resolution of the year 2006 to the end of the crisis in 2009, then it will evaluate years 2010 to 2013, and finally it will explore recent years, from 2014 to this current year.

 

At the end of the year 2006, the discount rate was at the highest it has been during the last 10 years. Even if the real estate market was becoming weaker, many sectors continued to be strong. As a result, the board of directors decided to maintain the discount rate high, at 6.25%. Some directors believed that the economic growth was constant, and that inflation would continue to decrease. During the next six months the discount rate was maintained given the healthy overall look of the economy, however, many borrowers start having financial difficulties. Interest rates started rising, and they were no longer able to pay their mortgages back. Hence, many banks went bankrupt because of the high number of customers defaulting.  These were the first signs of the worst financial crisis since 1929.

 

On September 17, 2007, the Federal Reserve decided to decrease the discount rate to 5.75%, but this measure was not sufficient to stop the financial crisis. The employment report acknowledged a shortage in labor supply, which was a sign of a weaker economy. The discount rate continued decreasing during the last six months of 2007, but the economy kept deteriorating as well as financial markets. Some directors believed that continuing to decrease the discount rate could help the economy’s recovery. Thus, by the end of the year 2007, the discount rate decreased to 4.75%.

 

The year 2008 started with a low discount rate of 3.50%, and continue diminishing throughout the year until it accounted for 0.50%. The reason is that many indicators of economic growth were performing poorly. The unemployment rate was high, whereas the manufacturing, housing and spending rates were very low. This year is known to have suffered the worst economic crisis since the Great Depression. The Federal Reserve resolved to lower the discount rate in order to increase liquidity, and improve the economic performance. As the prices for energy and basic commodities started falling, the board of directors decided to stimulate aggregate demand by increasing the amount of available cash.

 

At the beginning of the year 2009, the board of directors realized that the economy was weaker. As there was a lot of uncertainty about the economy’s future, the asset prices were high, and the efforts made by the government to improve liquidity were minimal. Financial markets continued to be affected whereas households, and corporations  refrain from spending. A lack of credits also inhibited the economy’s recovery. For these reasons, the FED’s board of directors decided to maintain the discount rate small so that banks could lend more money, and strengthen the economic situation. By the end of the year 2009, the FED decided to establish an interest rate of 0.50%. The economy began to recover albeit unhurried. They previewed an unrushed economic recovery for the next coming years. According to the FED’s report of December 23rd, 2009, financial markets were performing better during the last months of this year, nevertheless, financial intermediaries were still having trouble equilibrating their balance sheets. The housing industry showed a recovery, however, this was only possible because of the money lent to first-time buyers. The employment rate continued to be low, but it was improving. At the end of the year 2009 the board of directors decided to maintain the discount rate small.

 

At the beginning of the year 2010, American Federal Reserve Banks changed their attitudes towards the monetary policy. As they were optimistic about the recovery of the American Economy, the FED established an increase on the primary credit rate of ¾. This discount rate remained until the end of 2015.

 

According to the Federal Open Market Committee, there was a moderate resurgence in the American Economy during this period. The Federal Reserve website states that “although the unemployment rate declined somewhat since” the summer of 2015, “it remained elevated. Households spending continued to advance, and the housing sector showed further signs of improvement, but growth in business fixed investments slowed down. Inflation had been running somewhat below the Committee’s longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations remained stable.” From this, to ensure price stability and generate a stronger economic recovery, the FED decided to maintain the discount rate.

 

Throughout the beginning of 2013, there was a debate over the discount rate and whether there is a need to change it. Such participants as the directors of the Federal Reserve Bank of Boston wanted to decrease the current rate to ½ percent, whereas the Bank of Kansas City was willing to increase that rate to 1 percent. Although having these debates, the discount rate stayed the same. Overall, during the first half of 2013,  Federal Reserve Bank directors viewed actions in the economy as to be increasing at a moderate pace. The housing and auto sectors were strengthening their positions, employment was improving, though such departments as unemployment and manufacturing made directors left with opposite opinions.

 

By the end of 2013, almost all directors were delighted with the economy growth and there was no change in the discount rate in the end. Problems considering fiscal policy were gone, the labor environment was positive, the commercial and residential building department faced improvements. That all led most directors to vote for the discount rate to stay as it was.

 

Although the discount rate haD stagnated at 0.75% during 5 years, the FED decided to FINALLY increase it to 1 % on December 2015.  Then it was set to 1.25% on December 2016. This WAS the second time in 10 years that the FED increaseD the discount rate, and the first time after the Donald Trump’s election. Moreover, it will rise gradually in the coming months to a level that is still unCERTAIN TO the financial world.

 

Because of the conditions on the current market, and inflation, the FED decided to increase the discount rate. Therefore, many improvements in the economy, MULTIPLIED consumer spending and a growth in the manufacturing industry have been noticed after THE AUGMENTATION OF this rate. In fact, the economy recovered, and the unemployment rate HAS BEEN decreasING during this current year. As a consequence, the GDP incremented in the USA. Consumers spend more money, and they are able to borrow despite the high interest rateS thanks to their greater income. These are the reasons why, the board of directors voted to INCREMENT the discount rate in November 2016.

 

as THE inflation is still rising, the Federal Open Market Committee forecast that the interest rate will reach 1.4% in 2017, and 2.1% in 2018. Thus, the Fed haS to establish the discount rate according to the economic situation IN the USA.

 

ONE can also consider the political aspects THAT INFLUENCED the establishment of the the discount rate. In fact, Donald Trump has a divergent manner of leading the country. AS A RESULT, the national debt is becoming riskier causing the discount rate to increase. Besides, the augmentation of the discount rate reflects FED’s reaction to the president’s plan of cutting taxes and multiply spending. IN THE MEANWHILE, ONE CAN ONLY HOPE THAT THE US ECONOMY WILL CONTINUE TO BE IMPROVED.

Sources:
https://www.thebalance.com/federal-reserve-discount-rate-3305922
http://www.bankrate.com/rates/interest-rates/prime-rate.aspx
https://fred.stlouisfed.org/series/INTDSRUSM193N
https://www.federalreserve.gov/econresdata/ifdp/2006/index.htm
https://www.federalreserve.gov/newsevents/press/monetary/monetary20070109a1.pdf
https://www.federalreserve.gov/newsevents/press/monetary/bcreg20070904b1.pdf
https://www.federalreserve.gov/newsevents/press/monetary/20121212a.htm
http://www.investopedia.com/articles/economics/09/financial-crisis-review.asp
https://www.federalreserve.gov/newsevents/press/monetary/monetary20100112a1.pdf

Group 17 :The FED’s federal discount rates over the last 10 year.

Federal Reserve System (FED)

 

The central bank of the United States is the FED. FED stands for Federal Reserve System but this is also referred to as the Federal Reserve for short. Although the FED is an independent government institution, the American central bank is owned by a number of large banks and therefore not by the state. The main governing body of the FED is the Board of Governors which consists of 7 members who are appointed by the President of the United States. In addition to the national FED there are 12 regional Reserve Banks. 5 representatives of these regional reserve banks together with the 7 members of the board of governors make up the FOMC (Federal Open Market Committee). The primary responsibility of the FOMC is to supervise open market operations through monetary policy. One important responsibility of the Federal Reserve is to safeguard the stability of the United States’ financial system. The FED also has various other functions, including:

  • ‘managing’ the national money supply by means of monetary policy with the aim of:
  • supervision and regulation of the private banks;
  • preventing or resolving banking panics.

 

What is discount rate ?

The interest rate at which an eligible financial institution may borrow funds directly from a Federal Reserve bank. Banks whose reserves dip below the reserve requirement set by the Federal Reserve’s board of governors use that money to correct their shortage. The board of directors of each reserve bank sets the discount rate every 14 days. It’s considered the last resort for banks, which usually borrow from each other.

How it’s used: The Fed uses the discount rate to control the supply of available funds, which in turn influences inflation and overall interest rates. The more money available, the more likely inflation will occur. Raising the rate makes it more expensive to borrow from the Fed. That lowers the supply of available money, which increases the short-term interest rates. Lowering the rate has the opposite effect, bringing short-term interest rates down

Discount rate over the last 10 years

The Federal Reserve raised the Fed funds rate 1/4 point at the December 14, 2016, FOMC meeting. Most FOMC members think conditions are robust enough to warrant it. Members are pleased with recent strong jobs reports. The Fed funds rate is now 0.75 percent.  For details, see Current Fed Funds Rate.

Fed Chair Janet Yellen explained at the November 17, 2016, Congressional meeting why the Fed isn’t affected by the election outcome.

Fed Board Members look at economic data, which won’t register the effects of a Donald Trump Presidency until he implements policies in 2017.  Since he has promised expansionary fiscal policies, the Fed will probably follow contractionary monetary policy to prevent inflation. That’s because the economy is growing at a healthy rate. Tax cuts and increased spending in 2017 will overheat the economy, causing inflation. For more, see Which Phase of the Business Cycle Are We Currently In?

The Fed last raised its benchmark rate to 0.5 percent at its December 2015 meeting. That was the first rate increase since June 29, 2006. The rate had been at virtually zero (between 0 to 0.25 percent) since December 16, 2008. The Fed lowered it to combat the Great Recession.

The Fed funds rate directly affects short-term interest rates. These include the prime rate, credit card interest rates, and savings account rates.

It indirectly affects long-term rates, such as mortgages, corporate bonds, and ten-year Treasury notes. The Fed will raise those rates when it sells its holdings of Treasury notes and bonds. The Fed acquired $4 trillion of those through its Quantitative Easing program. Find out When Will Interest Rates Be Raised?

and What Is the Relationship Between Treasury Notes and Mortgage Interest Rates?

Why the Fed Is Raising Rates Now

The Fed is anxious to return rates to the healthy 2 percent level. It wants to get the economy out of a possible liquidity trap. That’s when families and businesses hoard cash instead of spending it. Low interest rates don’t give them much incentive to invest. The only way out of a liquidity trap is to raise interest rates.

The Fed also wants to raise rates because it’s been talking about it for more than a year. In response, forex traders expected the dollar’s value to rise. To take advantage of that, they shorted the euro. That strengthened the dollar 25 percent in 2014 and 2015. The strong dollar hurt exports and slowed economic growth. It also created lower import prices. That reduced the chance of inflation. If people expect prices to stay the same or drop, they have less incentive to spend now. They know their purchase might cost less in the future.

How It Affects You

Once the Fed raises the Fed funds rate, how high will it go?

Probably another .25 percent at first, as the Fed likes to take gradual steps whenever possible. The Fed expects to raise it to 1.5 percent in 2017. It will increase it to 2 percent in 2018 and 3 percent in 2019. The Fed forecasts inflation to remain around 2 percent until 2022. That’s because it will make sure that inflation is no worse than that. Here are 5 Steps to Take Now to Protect Yourself from Fed Rate Hikes.

Historically, the Fed funds rate remains between 2-5 percent. The highest it’s ever been was 20 percent in 1981 to combat stagflation and an inflation rate of 12.9 percent. That was an unusual circumstance caused by wage-price controls, stop-go monetary policy, and taking the dollar off of the gold standard. For more, see U.S. Inflation Rate: Current Rate, History, and Forecast

Former Federal Reserve Chairman Ben Bernanke has said that the most important role of the Fed is to maintain consumer and investor confidence in the Fed’s ability to control inflation. That means the Fed is more likely to raise rates than lower them.

Find out what Wall Street traders think the Fed will do with the Fed Funds Futures as a Predictive Tool.

 

 

DATE Fed Funds Rate  EVENT
2005: GDP = 3.3%, Unemployment = 6%, Inflation = 3.4%
Feb 2 2.5% Subprime borrowers could not afford mortgages when rates reset, typically in 3rd year.
Mar 22 2.75%
May 3 3.0%
Jun 30 3.25%
Aug 9 3.5%  
Sep 20 3.75%  
Nov 1 4.0%  
Dec 13 4.25%  
Fed Chair Ben Bernanke (February 2006 – January 2014)
2006: GDP = 2.7%, Unemployment = 6%, Inflation = 2.5% 
Jan 31 4.5% Raised to cool housing market bubble. More homeowners default.
Mar 28 4.75%
May 10 5.0%
Jun 29 5.25%
2007: GDP = 1.8%, Unemployment = 6%, Inflation = 4.1%
Sep 18 4.75%  
Oct 31 4.5%  
Dec 11 4.25%  
2008: GDP = -0.3%, Unemployment = 6%, Inflation = 0.1%
Jan 22 3.5%  
Jan 30  3.0%  
Mar 18 2.25%  
Apr 30 2.0% LIBOR began rising.
Oct 8 1.5%  
Oct 29 1.0%  
Dec 16 0.25% Effectively zero. The lowest fed funds rate possible.
Fed Chair Janet Yellen (February 2014 – January 2018).
2015: GDP = 2.6%, Unemployment = 6%, Inflation = 0.7% 
Dec 17 0.5%  
2016: GDP = 3.2%, Unemployment = 4.6%, Inflation = 0.4% (as of December, 19 2016.)
Dec 14 0.75%  

 Discount rate over the last 10 years

 

http://www.bankrate.com/rates/interest-rates/federal-discount-rate.aspx#ixzz4ZyhqPhBC

http://www.global-rates.com/interest-rates/central-banks/central-bank-america/fed-interest-rate.aspx

https://www.thebalance.com/fed-funds-rate-history-highs-lows-3306135

Group 13 : Analysis of the FED’s federal discount rates over the last 10 years

WHAT IS THE FED?

The Federal Reserve often referred to as « the Fed » is the central bank of the United States. The congress created the Fed in 1913 to help promote a safe and sound monetary and financial system for the US and since 2014, Dr. Janet L. Yellen took office as its Chair of the Board of Governors

WHAT IS THE DISCOUNT RATES OF THE FED?

The Federal Reserve discount rate is how much the U.S. central bank charges its member banks to borrow from its discount window to maintain the reserve it requires. There are three discount rates:

1.       The primary credit rate is the basic interest rate charged to most banks. It’s higher than the Fed funds rate. Here’s the current discount rate.

2.       The secondary credit rate is a higher rate that’s charged to banks that don’t meet the requirements needed to achieve the primary rate. It’s typically a half a point higher than the primary rate. Here’s more on the primary and secondary programs.

3.       The seasonal rate is for small community banks that need a temporary boost in funds to meet local borrowing needs. That may include loans for farmers, students, resorts and other seasonal activities. Here’s more on the seasonal discount rate program.

THE EVOLUTION OF THE DISCOUNT RATE

WHAT HAPPENNED ON 2007?

The discount rate is usually a percentage point above the Fed funds rate, because the Fed prefers banks to borrow from each other. It’s usually changed by the FOMC in conjunction with the Fed funds rate.

However, on August 17, 2007, the Fed board made the unusual decision to lower the discount rate without lowering the Fed funds rate to restore liquidity in the overnight borrowing markets. It was trying to combat a lack of confidence banks had with each other. They were unwilling to lend to each other because none wanted to get stuck with the other’s subprime mortgages.

The Federal Reserve cut its target interest rate Tuesday to historic lows between zero and a quarter percentage point and said it could expand a program of unorthodox lending and securities purchases.

After two days of discussion among Fed officials, the central bank said it would use every weapon from its arsenal to lift the U.S. from recession. It began by reducing its target interest rate.

 

WHAT NOW?

In a succession of moves necessitated by the financial crisis and the Great recession the committee also voted to raise the discount rate a quarter point to 1 percent in at the end of 2015. There were no dissents, even though multiple FOMC members publicly over the past few months have expressed reservations about rate hikes. The committee also approved, at the end of 2016, a quarter-point increase in the discount, or primary credit, rate from 1 percent to 1.25 percent.

In fact When the Federal Reserve (Fed) raises or lowers interest rates a chain reaction is set into motion. It’s like the domino effect. The Fed is the first domino and whatever they do — creates the chain reaction. If the fed raises interest rates, banks raise their prime rate, which in turn affects mortgage rates, car loans, business loans, and other consumer loans. However, a bank can raise or lower their prime rate without the FED making the first move. It is uncommon for most banks to change their prime rate without the fed making the first move — but it does happen.

Lower interest rates usually spur the economy by making corporate and consumer borrowing easier. Higher interest rates are intended to slow down the economy by making borrowing harder.

 

 

References:

http://www.foundationsforliving.org/articles/foundation/fedraiselower.html

https://fred.stlouisfed.org

https://www.wsj.com/articles/SB122945283457211111

https://www.federalreserve.gov/aboutthefed/bios/board/yellen.htm

https://www.federalreserve.gov/aboutthefed/default.htm

https://www.thebalance.com/federal-reserve-discount-rate-3305922

http://www.cnbc.com/2015/12/16/fed-raises-rates-for-first-time-since-2006.html

http://www.cnbc.com/2016/12/14/fed-raises-rates-for-the-second-time-in-a-decade.html

Group 7 : Analysis of the FED’s federal discount rates over the past 10 years

What is the FED’s discount rate ?

How does the Federal Reserve determine the discount rate ?

There are several different discount rates offered through the Federal Reserve system. Technically, discount rates are set by each individual Reserve branch and its board of directors, but their decisions are subject to review by the Board of Governors of the Federal Reserve. However, transitions from regional to national credit markets have produced a national discount rate across all Reserve banks.

Most references to the Federal Reserve’s discount rate are actually talking about the primary credit rate. The primary credit rate is the interest rate charged on short-term (normally overnight) loans that are made by the Fed to commercial banks and other financial institutions. These transactions take place through a lending facility known as the discount window.

Typically, this prime credit rate is set a little higher than short-term market interest rates. Since these rates are often targeted by the Fed’s bond purchase or quantitative easing programs, most of the control over the discount rate rests with the central bank anyway. Discussions about the target rates for the Federal Reserve occur at Federal Open Market Committee meetings.

Prime credit rates are only offered to institutions that the Fed believes have solid financial health, greatly reducing the default risk. Secondary credit rates may be offered to institutions that need short-term liquidity but don’t qualify for prime credit. These rates are set above the interest rate on prime credit. The last discount rate is for seasonal credit, which is extended to small institutions that have recurring annual fluctuations that limit cash flow. These tend to be in the agricultural or tourist communities.

The non-prime rate is also referred to as the base rate or the repo rate. All of these are distinct from the federal funds rate, which is the interest rate at which banks and other institutions lend to each other.

FED’s discount rates over the past 10 years

January 2007 : 6.25
January 2008 : 3.50
January 2009 : 0.50
January 2010 : 0.50
January 2011 : 0.75
January 2012 : 0.75
January 2013 : 0.75
January 2014 : 0.75
January 2015 : 0.75
January 2016 : 1.00
The following graph shows the evolution of the FED’s discount rates
Analysis of the FED’s discount rates over the past 10 years
We can say that the FED’s discount rates have generally known a decrease between 2007 and 2009 because of the subprime crisis. In fact, we can see that From January 2007 to January 2008, the discount rate has decrease for about 2.75 percent what is huge. But it is not the worst, actually, the following year, we can also observe a decrease of 3 percent in the discount rate. This is due to the fact that a lot of Financial institutions were affected by the crisis and in response to this, the Federal reserve decide to lower the discount rate in order to stabilize the Financial market.
Then from January 2009 to January 2010, the discount rate is stable.
Next, in January 2011, the discount rate knows a little increase of 0.25 percent since the Financial institutions start recovering from the crisis is the market is quite stable.
This discount rate is going to stay stable until January 2015.
Finally, between January 2015 and January 2016, there is a little increase of the discount rate .
References
Video retrieved from youtube.com/watch?v=Q01KEwDc1fc
Picture retrieved from https://fred.stlouisfed.org/graph/?g=8b5

How does the Federal Reserve determine the discount rate? | Investopedia http://www.investopedia.com/ask/answers/013015/how-does-federal-reserve-determine-discount-rate.asp#ixzz4ZyUU67NI

 

GROUP 5: Federal discount rate

Firstly, what’s means exactly the interest rate and how it’s used?

  • Firstly, the interest rate may borrow funds directly from a Federal Reserve bank. Banks whose reserves dip below the reserve requirement set by the Federal Reserve’s board of governors use that money to correct their shortage. The board of directors of each reserve bank sets the discount rate every 14 days. It’s considered the last resort for banks, which usually borrow from each other.
  • The Fed uses the discount rate to control the supply of available funds, which in turn influences inflation and overall interest rates. The more money available, the more likely inflation will occur. Raising the rate makes it more expensive to borrow from the Fed. That lowers the supply of available money, which increases the short-term interest rates. Lowering the rate has the opposite effect, bringing short-term interest rates down.

 

Furthermore, the Federal Reserve has done just what it signaled it would do: Nothing. At the end of a two-day meeting on Wednesday, the Fed’s rate-setting committee left the target for the federal funds rate unchanged at 0.50 percent to 0.75 percent. That decision is a reprieve, perhaps temporarily, for interest rates on home equity lines of credit and credit cards, which jumped after the Fed raised its benchmark rate in December 2016.

Policymakers noted in a statement that labor conditions and household spending look positive, and that « measures of consumer and business sentiment have improved of late, » perhaps a nod to the new Trump administration. Although the central bankers offered no clues as to when the next rate hike might happen, they bolstered language in their statement suggesting they would be looking closely for evidence inflation is picking up.

« The Fed knows the inflation numbers are going to start looking different; the key is if inflation moves up any faster than the Fed expects, » says Greg McBride, CFA, Bankrate’s chief financial analyst. « If that happens, the Fed has to raise interest rates more aggressively. Both the bond market and the stock market will take it on the chin. »

Still, the move to stand pat is unsurprising. This was the first gathering since the December meeting, when the Federal Open Market Committee raised rates for the first time in a year and just the second in the last decade. It was also the first meeting since President Donald Trump, who has vowed to shake up employment and tax policy, took office.

« I don’t see the justification for another increase at this time, right after increasing a month ago, » says Alan MacEachin, chief corporate economist at Navy Federal Credit Union. « There is a significant amount of uncertainty out there with regard to the magnitude, scope and potential impact of any Trump administration fiscal plan. All is up in the air. »

Increase set for March?

The Fed next meets March 14-15, where speculation already has begun about whether that meeting will produce the first rate hike of 2017. The March meeting also will mark the first of the year in which Federal Reserve Board Chair Janet Yellen is expected to hold a post-meeting press conference. The CME Group FedWatch Index suggests there’s a roughly 20 percent chance the Fed will increase rates at its next meeting. The probability improves to close to 50 percent that by July the FOMC will have increased rates by a quarter percentage point.

Since the Fed’s December meeting, central bankers repeatedly have stressed they intend to boost rates gradually, forecasting three quarter-point hikes for the year spread out over eight meetings.

But any rate changes will be predicated on several things:
1.) Signs that economic conditions continue to improve.
2.) An uptick in inflation.
3.) Better projections about how the Trump administration’s planned stimulus program and trade policies will impact growth.

McBride doubts the Trump administration will have adequately answered its fiscal policy questions in time for the next Fed meeting.

« They’re keeping their options open, » McBride says of FOMC members. « Realistically, I don’t see how we get any clarity on fiscal policy changes until mid-March. »

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Indeed, the economy continues to show modest gains, with the U.S. unemployment rate standing at 4.7 percent — or close to full employment — the inflation rate has ticked up to 1.7 percent, close to the Fed’s 2 percent goal.

That’s the good news. The bad news is the overall economy grew just 1.6 percent in 2016, the slowest since 2011.

« The Fed is likely to assess incoming data to see if further rate increases are warranted, but they’re not going to do it until the data confirms the move, » MacEachin says. « The last two increases have been widely signaled in advance, and I don’t think they’re going to be any different. They’re not going to want to move until the markets are mostly expecting this. »


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