{"id":8291,"date":"2015-05-20T06:03:02","date_gmt":"2015-05-20T11:03:02","guid":{"rendered":"http:\/\/olduvai.ca\/?p=8291"},"modified":"2015-05-20T06:04:47","modified_gmt":"2015-05-20T11:04:47","slug":"8291","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=8291","title":{"rendered":"Is the Fed Going to Raise Mortgage Interest Rates?"},"content":{"rendered":"<h3><strong><a href=\"http:\/\/www.acting-man.com\/?p=37536\" target=\"_blank\">Is the Fed Going to Raise Mortgage Interest Rates?<\/a><\/strong><\/h3>\n<p><strong>The Interest Rate Guessing Game<\/strong><\/p>\n<p>Seldom does a day go by without some guru offering his or her prediction on when the Fed is going to raise rates.\u00a0 They all come with scholarly theories supporting their prediction. \u00a0It sounds like a fun game.\u00a0 I want to play, but I\u2019m not sure what the object of the game is.<\/p>\n<p>By \u201cinterest rate\u201d, I assume the gurus are talking about the Federal Funds rate or the discount rate.\u00a0 The chart below from the St Louis Fed shows that the Federal Funds rate has been practically at zero since 2008.\u00a0 This rate has never been so low for so long, rendering it an inconsequential monetary policy tool for years.\u00a0 Aside from representing a symbolic gesture, does it really matter whether the Fed Funds rate is at zero or at zero plus 25 basis points?\u00a0 Is there any chance that the FOMC will ever raise the rate to, say, 3%?<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-37537 size-full\" src=\"http:\/\/www.acting-man.com\/blog\/media\/2015\/05\/1-FF-rate.png\" alt=\"1-FF rate\" width=\"630\" height=\"378\" \/>Effective federal funds rate since the 1950s<\/p>\n<p>The following chart, also from the St Louis Fed, shows the asset side of the Fed\u2019s balance sheet.\u00a0 While the Federal Funds rate was kept at zero, the Fed went hog wild and increased its balance sheet from less than $1 trillion in the beginning of 2008 to about $4.5 trillion today.<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-37538 size-full\" src=\"http:\/\/www.acting-man.com\/blog\/media\/2015\/05\/2-Fed-assets.png\" alt=\"2-Fed assets\" width=\"667\" height=\"356\" \/>Total assets held by the Federal Reserve<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n<div><\/div>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Is the Fed Going to Raise Mortgage Interest Rates? The Interest Rate Guessing Game Seldom does a day go by without some guru offering his or her prediction on when the Fed is going to raise rates.\u00a0 They all come with scholarly theories supporting their prediction. \u00a0It sounds like a fun game.\u00a0 I want to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[39,49,303,305,1154,431],"class_list":["post-8291","post","type-post","status-publish","format-standard","hentry","category-economics","tag-assets","tag-balance-sheet","tag-fed","tag-federal-reserve","tag-interest-rate-policy","tag-interest-rates"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8291","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8291"}],"version-history":[{"count":3,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8291\/revisions"}],"predecessor-version":[{"id":8294,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8291\/revisions\/8294"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8291"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8291"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8291"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}