interest rates: The Fed rate and the 30 year fixed rate
- 01/28/08 11:29 PM
I am constantly asked by my clients how the 30 year rate is affected by the short terms moves made by the fed lowering the discount rate and I find it to be a difficult question to answer effectively. There is no instant direct correlation between the discount rate and the 30 year rate, they move independently, but often in the same direction. The 30 year rate is an indication of out economy’s strength and the rate of unemployment. Because the discount rate is often lowered to stimulate economic activity during times of high unemployment and economic struggle, the two rates … (1 comments)
I am constantly asked by my clients how the 30 year rate is affected by the short terms moves made by the fed lowering the discount rate and I find it to be a difficult question to answer effectively. There is no instant direct correlation between the discount rate and the 30 year rate, they move independently, but often in the same direction. The 30 year rate is an indication of out economy’s strength and the rate of unemployment. Because the discount rate is often lowered to stimulate economic activity during times of high unemployment and economic struggle, the two rates … (1 comments)
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