With Fed Funds rates at 0.25%, or almost zero, the pendulum must swing back in the other direction.
It means the public will be given an indication of how the Fed thinks rates will move for years into the future.
BBC: US Federal Reserve to publish interest rate projections
"It was a big theme shift in January when the Fed lowered rates before their scheduled meeting and then lowered them again, " Callahan says.
Traditionally, during recessionary periods, the Fed lowers rates, which encourages consumer borrowing and the increased levels of spending help drive the economy to stronger growth levels.
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It was bad enough that the Fed held rates far too low, but at least a fig leaf of uncertainty kept the most brazen speculators in partial paralysis.
Housing starts provide another example: before the crisis they had topped 2 million during some months, something that had only happened twice before (after the Korean War as veterans from two wars came back, and in the mid-80s when the Fed lowered rates, Blitzer explained).
FORBES: Housing Markets Will Probably Never Return To Pre-Crisis Levels: Case-Shiller Chair Blitzer
Mr Bianco says this is the only time that long-term interest rates have risen during a period in which the Fed has cut rates either five times, or by a total of 250 basis points.
In recent years, the basis upon which the Fed sets interest rates has been far from clear to the Fed itself, as well as to financial markets.
The U.S. last faced a prolonged period of low rates in the 1940s and early 1950s, when the Treasury Department ordered the Fed to keep rates low so it would be easier to repay World War II borrowing, says New York University economic historian Richard Sylla.
The mounting concerns about overnight interbank rates and the commercial-paper market have led many investors to argue that the Fed should cut rates to restore calm.
The yield curve was inverted early in the year, but positively sloped when the Fed first cut rates Sept. 18, and has steepened still now in the wake of the Fed's surprise rate cut Jan. 22.
To stimulate after the bursting of the housing bubble (which itself resulted from the low interest rates used to juice the economy following the bursting of the dot-com bubble), the Fed lowered interest rates to practically zero.
Meanwhile, the Fed is holding the interest rates it controls, the Fed Funds Rate and the U.S. Prime Rate, at record low levels.
More than half think the Fed will hike rates in the latter half of the year.
Malpass and Wesbury have been recommending that the Fed raise interest rates to curb inflation expectations.
Obviously, if the Fed targets interest rates, then 0 percent is a lower bound.
Many are looking for the Fed to cut rates by year-end as economic growth slows.
He expects the Fed will reduce rates by 25 basis points when it meets September 18.
That, after all, was what happened in 1994 when the Fed last raised rates sharply.
Risk mismatches will complicate Fed policy when rates must rise to prevent serious inflation.
When the Fed started raising rates in June 2004, the overnight cost of money was just 1%.
Global economic growth and high levels of government debt will eventually force the Fed to raise rates.
Everyone is focused on what the FED plans to do with interest rates, meaning the FED FUNDS rate.
By October 1987, the dollar was weakening, the Greenspan Fed was raising rates and stocks began to sag.
Once again, the Fed left interest rates unchanged at 6.5% at its open-market committee meeting on August 22nd.
Wesbury is bullish because the Fed is cutting rates even as productivity booms.
Two things are all but certain when the Fed cuts interest rates: Inflationary pressures increase and investors flee dollar-denominated assets.
Each of the past five times when the Fed has cut rates thrice within three months, the stockmarket has rallied.
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