FED is on the Brink…with update at 1:30 PM CST
The FED fund rate is on the Brink of being pushed higher by the FED as the 3 month rate is approaching zero this week.
This at a time when longer term rates, the 10 year, 20 year, and 30 year rates are under extreme upside pressure because of the cheap short term rates creating speculative extremes.
People like me feel stupid on days like this when it is obvious that we live in an economic environment where extremes are allowed to percolate. That is about to change.
Later today or over the weekend I will provide some charts that backup these comments and what the FED has allowed to happen since January 25, 2018. They did not allow a free economy to work, discipline is gone and neither the Democrats or Republicans have the presence to change things at the moment.
Update: The panic to get out of longer term bonds and hide in short rates is pummeling the 3 month rate this week, current yield 0.03 %, down 2/3 since January 13 when it was 0.09 %. The FED does not want the rate to go negative as it will create problems in the CD market.