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The lower the fed funds rate, the more likely investors are to take on risk in order to boost returns.
Over the last 60 years, the average Fed Funds rate was 5percenttodayday, the Fed Funds rate is around.25percentt.25percent
The target Fed funds rate is now 2.25%.
That in theory should put a floor under the Fed funds rate.
Fed funds will therefore probably remain very low until home prices rise materially.
But while the gap between inflation and unemployment is narrowing, the Fed funds rate is unchanged.
Jan . 30 when it cut the discount and Fed funds rates.
It was 4.97percentt on Friday, well above the Fed funds rate of 4.25percentt.
The price of the overnight Fed funds rate doesn't change demand for this kind of stuff.
The probability of a cut ticked up yesterday, based on the Fed funds futures market.
How is it possible for the Fed funds rate to be higher than the Treasury rates?
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