Thursday, April 15, 2010

3 Basis Points Until Serious Inflation?

The effective Federal Funds rate closed at 0.22%, just 3 basis points away from the top of the Fed's target range. Will the Fed raise the target rate or start printing money? Market forces will cause the Fed to act much sooner than they want on this very important question.


  1. Thanks for highlighting this. As one trying to make sense of the economic chaos over the last 18 months, I troll a number of blogs trying to glean insight and education from writings ranging from analysis to sales pitches to apocalpytic rants, yet none seem to discuss this topic.

  2. Wenzel, So what's your call, will they raise the target rate or start printing money?

    How are you playing it?

  3. The printing presses have never stopped.

    Never will.

    OK, they will, when they:

    1. Run out of ink -- the ink suppliers all closed
    because gasoline trucks are getting hijacked
    and drivers have all quit.


    2. The electricity has been shut off because the
    power plant maintenance hasn't been done
    as the workers can't buy gas to get to work.