Historically, the average recession has been met with the Fed reducing the federal funds rate -- the overnight lending rate between depository institutions -- by 500 basis points. The problem is that the Fed only expanded the fed funds rate to a peak range of 2.25% to 2.5% during the longest economic expansion in U.S. history. Having reduced the fed funds rate back to an all-time low of 0% to 0.25%, the Fed has been left with no other choice but to lean on unconventional measures, such as quantitative easing (QE). To be frank, QE has a questionable track record over the long run.
Kommentera:
we will go way downside
Kommentera:
short term view
