Re:US economy returned to growth last quarter, expanding 2.6%
by function_seven on Thursday October 27, 2022 @01:22PM
(#33360895)
Look at the 3-month (90-day) commercial paper rates. They're split into different data sets on the FRED site[0][1], changing in 1997.
I combined them into a single chart here: https://ibb.co/h7c7DJS
(Is ImgBB a good site? I stopped using imgur after too many dark patterns)
Re:US economy returned to growth last quarter, expanding 2.6%
by lotsofpulp on Thursday October 27, 2022 @01:36PM
(#33361100)
Seems like it came down after 2007 and 2000 highs at similar levels. But who knows, maybe US government will leave it high. Maybe they will bring it back down to juice asset prices. Maybe the parameters of the world have changed to not allow that.
Re:US economy returned to growth last quarter, expanding 2.6%
by rory on Thursday October 27, 2022 @02:19PM
(#33361720)
> maybe US government will leave it high
Although the Fed can backstop commercial paper in emergencies (and they did so at the beginning of the pandemic), it's extremely unlikely that they start taking on enough to move rates in the medium term (like they did with mortgage backed securities). So this is not a rate that the government controls except very indirectly.
Re:US economy returned to growth last quarter, expanding 2.6%
by nostrademons on Thursday October 27, 2022 @11:47PM
(#33367428)
We had a taper tantrum in Jun 2019 - the commercial paper markets almost seized up, and the Fed started dropping rates then, a good 9 months before COVID. That's what business leaders remember. We couldn't service 2.5% rates in 2019 (actually more like 2%, it takes time before companies need to rollover their debt), it seems extremely doubtful that we can service 3.25% now.
https://fred.stlouisfed.org/series/fedfunds
Last time fed funds rates were as high as they are now was Jun 2019. And then a few more times before that.