Federal Reserve to increase interest rates by 25 basis points (federalreserve.gov) 45 points by scrlk 3y ago ↗ HN
[–] scrlk 3y ago ↗ Latest dot plot (page 4, PDF): https://www.federalreserve.gov/monetarypolicy/files/fomcproj...Of note - no cuts planned for this year. [–] MuffinFlavored 3y ago ↗ but fed futures contracts aren’t believing it/pricing it in, right? [–] quickthrowman 3y ago ↗ Fed funds futures traders are expecting a cut at the July meeting by a slight margin, and a 95% chance of a cut by the December meeting as of tonight.https://www.cmegroup.com/markets/interest-rates/cme-fedwatch... [–] MuffinFlavored 3y ago ↗ 71% of a cut by July91% of a cut by September95% of a cut by NovemberKind of weird that the head chair of the Federal Reserve board comes out and says "no cuts this year" verbatim, and this pricing mechanism you and I look at says the exact opposite?
[–] MuffinFlavored 3y ago ↗ but fed futures contracts aren’t believing it/pricing it in, right? [–] quickthrowman 3y ago ↗ Fed funds futures traders are expecting a cut at the July meeting by a slight margin, and a 95% chance of a cut by the December meeting as of tonight.https://www.cmegroup.com/markets/interest-rates/cme-fedwatch... [–] MuffinFlavored 3y ago ↗ 71% of a cut by July91% of a cut by September95% of a cut by NovemberKind of weird that the head chair of the Federal Reserve board comes out and says "no cuts this year" verbatim, and this pricing mechanism you and I look at says the exact opposite?
[–] quickthrowman 3y ago ↗ Fed funds futures traders are expecting a cut at the July meeting by a slight margin, and a 95% chance of a cut by the December meeting as of tonight.https://www.cmegroup.com/markets/interest-rates/cme-fedwatch... [–] MuffinFlavored 3y ago ↗ 71% of a cut by July91% of a cut by September95% of a cut by NovemberKind of weird that the head chair of the Federal Reserve board comes out and says "no cuts this year" verbatim, and this pricing mechanism you and I look at says the exact opposite?
[–] MuffinFlavored 3y ago ↗ 71% of a cut by July91% of a cut by September95% of a cut by NovemberKind of weird that the head chair of the Federal Reserve board comes out and says "no cuts this year" verbatim, and this pricing mechanism you and I look at says the exact opposite?
[–] toombowoombo 3y ago ↗ What are basis points? [–] pstorm 3y ago ↗ It is 1/100 of a percent [1]. Just a different way of saying .25%[1] https://en.wikipedia.org/wiki/Basis_point [–] DANmode 3y ago ↗ No additional meaning to finance people.Far less meaningful for the average Joe.Not "just" a different way, when framed. [–] aaronrobinson 3y ago ↗ Aka bips [–] tebs1200 3y ago ↗ The reason behind "Basis Points" is that saying something has increased by a percentage is ambiguous.If interest rates are 5% and they are "increased by 0.25%", does that make them 5.25% (adding 0.25% of 100) or 5.0125% (adding 0.25% of 5).Basis points are supposed to be an unambiguous way of explaining the increase.
[–] pstorm 3y ago ↗ It is 1/100 of a percent [1]. Just a different way of saying .25%[1] https://en.wikipedia.org/wiki/Basis_point [–] DANmode 3y ago ↗ No additional meaning to finance people.Far less meaningful for the average Joe.Not "just" a different way, when framed.
[–] DANmode 3y ago ↗ No additional meaning to finance people.Far less meaningful for the average Joe.Not "just" a different way, when framed.
[–] tebs1200 3y ago ↗ The reason behind "Basis Points" is that saying something has increased by a percentage is ambiguous.If interest rates are 5% and they are "increased by 0.25%", does that make them 5.25% (adding 0.25% of 100) or 5.0125% (adding 0.25% of 5).Basis points are supposed to be an unambiguous way of explaining the increase.
10 comments
[ 3.2 ms ] story [ 37.0 ms ] threadOf note - no cuts planned for this year.
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch...
91% of a cut by September
95% of a cut by November
Kind of weird that the head chair of the Federal Reserve board comes out and says "no cuts this year" verbatim, and this pricing mechanism you and I look at says the exact opposite?
[1] https://en.wikipedia.org/wiki/Basis_point
Far less meaningful for the average Joe.
Not "just" a different way, when framed.
If interest rates are 5% and they are "increased by 0.25%", does that make them 5.25% (adding 0.25% of 100) or 5.0125% (adding 0.25% of 5).
Basis points are supposed to be an unambiguous way of explaining the increase.