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Effective Federal Funds Rate

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The Next Recession Is Right Around The CornerMonetary Policy is a funny thing, when times are good we raise rates to prevent the economy from overheating and when times are bad we cut rates to help stimulate the economy. But what if it is interest rates that are leading the economy and not the economy leading interest rates. In that case interest rates would paint a very interesting picture. In my opinion it is interest rates that lead the economy. By lowering rates you entice debt and consumption and by raising rates you cause the inability to service debt and a subsequent recession ensues. It is obvious when looking at this chart of the US Federal Funds Rate that a drop in rates causes a larger debt load and then rates are raised until debt is so un-serviceable a recession begins, to which the response is to cut rates again even lower which does nothing but entice more debt. its a self fulfilling cycle all the way to zero, and soon negative interest rates. This chart in conjunction with the fact Gold is breaking out, the US stock market indexes are forming a peak, the yield curve has inverted and interest rates around the world are falling once again kick starting the next easing cycle all points to the beginning of the next recession being right around the corner. This is not financial advice, just be careful out there.
FRED:FEDFUNDS
by Markster
1
Yield curve inversion tracking updateI thickened the most important indicator of 10yr-2yr thickened purple... almost there! Once yield curve inverts you can expect recession to already have started to possibly a wait at most of 2 years... given the fundamentals globally I think recession will happen much much sooner than any central bank will admit. It's to everyone's interest to delay the official word on recession and doctor each countries' global GDP data to kick the can down the road as long as possible.
FRED:FEDFUNDS
by DropDead_Fed
Why I Don't Follow TA Anymore and Why Bitcoin Isn't That SpecialOnce again, the chart should be self-explanatory, but I thought maybe some users would be too young to be familiar with some concepts, or simply uninformed. Being concrete 0.00% , the reference rate given set by the Fed is an inflation target. Inflation is a controversial topic, but both sides have points in favour. Inflation is happening, and the logic for it is to encourage spending. Likewise, when a reserve currency rises, the competing assets, prominently stocks, tend to slow down. The opposite is also true: if the interest rates are high enough, during a period where economic stimulus is required, central banks can turn dovish and make people want to get rid of their currency, making them spend and avoiding stagnation. In this chart I marked the 5 financial crisis that are relevant to Bitcoin's study. The dotcom bubble rose while regulations were lax and a crypto-like craze not only reached nerds, but anyone who had a bank account. Without any actual knowledge of investment, the stock market inevitable bubbled out of its mind. You can see that the dollar was rising leading up to the dotcom crash. This happens because EM move their funds into dollars, since Wall Street is denominated in USD exclusively. After 8 years, a special kind of derivative asset, the CDO, swamped the market and undermined the credit system. In simple words, the world was full on ghost money and it only took the first bank to file bankruptcy to trigger a chain of unpayable debt. This idea of ghost money was an inspiration to create Bitcoin: money that can absolutely be anything but ghost. After the 2008 bubble was under control, Bitcoin -1.06% found its way into the public. Even if it wasn't as accessible, due to regulations put in place after 00 and 08, as well as the intrinsic difficulty of joining the market, the rise wasn't shy. With confidence of having found the bottom, people bought the dip. Then came 2011, when some after-effects of 08 hit France's credit ratings, subsequently spreading to the rest of Europe and hitting the nerve of the US as well. The slump didn't last long, but it can't be ignored. Moving forward we find the 4th financial crisis: the rise and fall of emerging markets and oil 0.48% price crash. Still an after-effect of 08, these two events are intertwined. After the global economy picked up pace again post-08, countries like Russia and China experienced a "catch-up" rally. Anyone in the industrial and engineering sectors will quickly understand why oil 0.48% prices would be so relevant in this context. However, like any explosive (un intended) run, some pullback happens after the economy overshoots its actual capacity. It was during the start of 2014 that the demand for oil 0.48% pulled back significantly. Unlike other commodities , oil 0.48% has its own economic category, since it basically fuels the world. The 2014 fall was cemented when Russia invaded the Ukrainian border, bringing international sanctions that strongly affected its GDP. All of these things together incited an exit from EM currencies and stocks into the dollar. During this period, the Fed rose interest rates to keep a balance between the dollar and the stock-market-turned-safe-haven. Near the end of 2015 things finally settled down, and the "Golden Bull" kept running up. Most of you will be familiar with the 5th financial crisis of 2018, lead by the Turkish lira. This was accompanied by further concerns raised by Argentina, Brazil, India, and South Africa. It was shortly before this began that Trump's administration opened the doors for a trade war. A trade war with China is sure to hit the stock market. It's obvious to anyone with eyes and has read "Made in China". Almost a year after the talks began, the dust has settled. The EM mentioned above haven't fully recovered, but the panic has gone down a lot, including the extreme talks of a war. That brings us to today. If the aforementioned economies continue their way, and Powell does take the global situation into account, we could see buyers relaxing on the dollar and letting investors move back into financial assets. My personal belief is that the overall situation has tranquilised, and buying stocks and crypto at this point would classify as buying the dip. Of course, I do not have a crystal ball, and for all I know Italy may lash out and trigger some panic across the eurozone. I'm not a hedge fund manager, and neither is anyone of you. None of your ideas or charts will move the market, and getting angry at other users for disagreeing will get you nowhere. Bitcoin -1.06% halvings are mostly insignificant. Hashrate wars are short term. Protocol exploits and exchange hacks impact the slope, but not the direction. Let me know if I incorrectly narrated some historical event, and I will gladly rectify.
FRED:FEDFUNDSLong
by UnknownUnicorn1038536
6
US Economic Growth: charting the GDP+GDI averageThe latest GDP number suggests inflation-adjusted annual growth of 4.2%. However, gross domestic income (GDI) (produced by the Bureau of Economic Analysis ) Both the GDP and GDI are estimates of economic growth (with one focused on expenditure and the other on income). The GDP-GDI average suggest economic growth rate to be in the 3% range. This average may prove to be a useful early warning of economic conditions as investor worries grow over "peak growth" and anticipation of the next recession. This average can be charted using data from FRED & Quandl: ('QUANDL:FRED/A261RL1Q225SBEA'+'QUANDL:FRED/A191RL1Q225SBEA')/2 More info: www.bloomberg.com
FRED:FEDFUNDS
by dime