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The Fed right now is in position to raise rates. That move will tend to reduce the value of their debt paper holdings. Why would the Fed, a private money making agency do that?
Unless it was issued with some sort of variable rate, interest due on outstanding debt obligations does not change because the federal funds rate does.
By the way, the Fed is a US government agency. Everyone who works at the Fed is a federal employee. Not necessarily so for those who work at the agent regional banks however. They are a different animal.
Well that's the problem with the Fed, in the opinion of many. Conflicts of interest, friends to reward.
Even if something really terrible happens to the economy, I bet you the high ups at the Fed will still be rich. I mean, did any of those big bankers become poor as a result of the 2008 crash?
This is part of why we have a Fed, and not monetary policy set by Congress for instance. The Fed is a private/public agency meld, and IMO works fine. It helped make me rich, so of course I'm biased.
Unless it was issued with some sort of variable rate, interest due on outstanding debt obligations does not change because the federal funds rate does.
By the way, the Fed is a US government agency. Everyone who works at the Fed is a federal employee. Not necessarily so for those who work at the agent regional banks however. They are a different animal.
It doesn't change rates, but it could change the value of the paper. Typically as rates rise, value goes down.
Fed monetary policy might be good for the economy and bad for the Fed. And of course visa versa.
"They" say there's no inflation, but they don't count all living costs in the index. Rents have gone up, car prices, groceries even. "Their" version of inflation is just nonsense.
It doesn't change rates, but it could change the value of the paper. Typically as rates rise, value goes down.
The Fed sets targets for the Federal Funds Rate -- the rate that applies in overnight markets for loans between member banks. Normally, open market sales and purchases of publicly held securities are used to influence those markets into conformity, but since December 2015, overnight reverse repurchase agreements have been used as well. When rates rise, it is prices that go down.
Quote:
Originally Posted by Hoonose
Fed monetary policy might be good for the economy and bad for the Fed. And of course visa versa.
The Fed's central mission is to conduct the nation's monetary policy. There is nothing that is "good for the Fed" that stands contra to that mission.
"They" say there's no inflation, but they don't count all living costs in the index. Rents have gone up, car prices, groceries even. "Their" version of inflation is just nonsense.
The CPI is estimated monthly by the Bureau of Labor Statistics. All of the prices you cited are in fact included in their price data and analyses. You may wish to spend less time in the Echo Chamber.
The Fed sets targets for the Federal Funds Rate -- the rate that applies in overnight markets for loans between member banks. Normally, open market sales and purchases of publicly held securities are used to influence those markets into conformity, but since December 2015, overnight reverse repurchase agreements have been used as well. When rates rise, it is prices that go down.
The Fed's central mission is to conduct the nation's monetary policy. There is nothing that is "good for the Fed" that stands contra to that mission.
Could it not be true that the sales and subsequent profits from unwinding the Feds QE holdings be less if they increase interest rates?
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