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Interest Rates and Fed Watching - The Side Stories

I think the main story of the interest rate increase decision is kinda boring at this point. But there are some side stories that I think are still fascinating.

1) Fortune has a sort of human interest story about the Fed. It's been so long since the Fed raised rates - that almost no one on the governing board has ever voted to increase rates before! It's a whole new thing for them.

2) The meatier story is from the New York Times. The mechanism that the Fed has used to control interest rates is no longer effective. There is so much cash in the system that Fed can't just tighten the reserve policy to raise interest rates. It's building a whole new system to borrow the money from the banks and soak it out that way.

This is all just inside baseball compared to the "real" story of the impact of the overall monetary policy. But I confess I'm going to be just as interested in the implementation details as the big picture.


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They've been testing the operational details of the reverse-repos for a few years now, and LIBOR is already on the way up, it seems, so it might not be so hard as all that.