Arnold Williams (notebuyer) wrote,
Arnold Williams

Federal Funds Rate

Well, folks, looks like we're due for a rise from the Fed again, at least if they follow Greenspan's formulas:

Federal funds rate = 8.5 + 1.4 (Core inflation - Unemployment).

Core inflation (all items less food and energy) is 2.6%
Unemployment (seasonally adjusted) is 4.5%

That leaves the prediction of the fed funds rate at 5.84%, while the actual target is 5.25% currently (with trading between 4 7/8 and 6 3/4, averaging about 5.28%, but with a spike in standard deviation that might indicate someone has noticed we're low.

Batten down the hatches, folks.
Tags: economics
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