Howestreet.com - the source for market opinions

ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

December 18, 2015 | Fed Funds Effective Rate Shows Fed Did Indeed Hike by 25 Basis Points

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

I was on record stating a belief the Fed would effectively hike by 1/8 point. I had that belief because that is what the Fed Fund Futures implied.

Regardless, I was wrong. If someone is going to prove you wrong it may as well be yourself.

Here is a table of Effective Fed Funds Rates straight from the New York Fed. I created the table from their downloadable data.

Effective Fed Funds Rate

DateEffective RateLowHighStd. Dev.Target Rate
2015-12-170.370.250.590.050.25-0.50
2015-12-160.150.080.550.040.00-0.25
2015-12-150.150.090.310.040.00-0.25
2015-12-140.150.070.310.040.00-0.25
2015-12-110.140.070.380.040.00-0.25
2015-12-100.140.070.380.040.00-0.25
2015-12-090.140.060.380.040.00-0.25
2015-12-080.130.060.350.040.00-0.25
2015-12-070.130.060.350.040.00-0.25
2015-12-040.130.060.350.040.00-0.25
2015-12-030.130.060.350.040.00-0.25
2015-12-020.130.040.350.040.00-0.25
2015-12-010.130.070.350.050.00-0.25
2015-11-300.080.040.310.060.00-0.25
2015-11-270.120.020.350.050.00-0.25
2015-11-250.120.060.350.040.00-0.25
2015-11-240.120.050.350.050.00-0.25
2015-11-230.120.070.350.050.00-0.25
2015-11-200.120.070.350.040.00-0.25
2015-11-190.120.050.350.050.00-0.25
2015-11-180.120.050.350.050.00-0.25
2015-11-170.130.070.350.050.00-0.25
2015-11-160.130.060.350.050.00-0.25
2015-11-130.120.060.350.040.00-0.25
2015-11-120.120.050.350.040.00-0.25

 

Previous effective rates hovered around 12.5 basis points. That is 1/8 of a point. A quarter-point (25 basis points) hike would have been to 37.5. An eighth-of-a-point hike would have been to 25 basis points. Today we are at 37.

Mike “Mish” Shedlock

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the HoweStreet.com Weekly Recap.

December 18th, 2015

Posted In: Mish Talk

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site

*
*

This site uses Akismet to reduce spam. Learn how your comment data is processed.