Wednesday, December 16, 2015

BREAKING Fed Raises Rates

The Federal Reserve has just released a statement announcing that they have raised the interest rates they control.

The Federal Reserve has decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent, from 0 to 1/4.

The full statement is here.


There were no dissents. All voting members of the FOMC voted for the hike.


 The interest rate paid on required and excess reserve balances at the Federal Reserve has been raised to 0.50 percent from 0.25 percent, effective December 17, 2015.


Wells Fargo Reacts to Fed Rtae Hike and Raise Rates for Borrowers


  1. You were right and the markets didn't stumble. Can't believe a multiple asset bubble can be maintained without accelerating money emission. Got to give credit where it is due.

  2. I guess you mean the Fed only pays 0,5% on excess reserves, not on required reserves right?

    1. Wow, didn't know that. And I should have googled it before making a dumb question, it immediately comes up on top of a google search for it. However it makes sense of course, if they would only pay on excess reserves then they would discourage banks from lending... However given that required reserves are less than 4% of total reserves it doesn't really matter anyway.

      Ok, if I got this right, then at around 4,4% interest payments it gets interesting, because then the total operating profit of the Fed would be eaten up by those interest payments, if their total profit stays at 115 billion like last year.

  3. Excess reserves rate hike I find more interesting. I thought they wanted inflation?

  4. You were right on the rate hike call this time. Markets not tanking (yet). I guess central planning does work. All hail our all-knowing Fed overlords! /s

  5. @ RW,

    Congrats on being correct.

    How high do you expect rates to go, and how fast will we get there?