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5

According to A Model for the Federal Funds Rate Target at page 13 changes as small as 6.25 basis points were sometimes observed prior to 1990 Similarly, according to The Relationship Between the Federal Funds Rate and the Fed's Federal Funds Rate Target: Is It Open Market or Open Mouth Operations? at page 4: In late 1989 the Fed began the practice ...


-6

If Fed is really using statistical techniques, then it is impossible to come at an answer in multiple of 25 points unless they are targeting an objective, else they are using guess work and using tradition as the excuse. OLD quarter point system, could benefit the ultra rich, they should use the decimal points increase similar to stock market. Doctors ...


7

I'm pretty sure it's just a policy that the Fed seems to follow. I know of no mechanical reason why they couldn't use more precise increments, but possibly for simplicity (or tradition) they choose to use more granular rates than other countries seem to. Keep in mind that influencing interest rates is an inexact science. The Fed will set rates at a certain ...


1

If you want to protect yourself from negative interest rates, the best way is to invest into long enough government bonds. The value of a bond increases as interest rates decrease, and decreases as interest rates increase. Essentially, by buying long government bonds, you are "fixing" the interest rate you are getting for the bond part of your portfolio. ...


2

For the US to accomplish negative interest rates it has to drastically increase the money supply - which it has several ways to do - but the outcome is that assets become more expensive. More practically "it costs more money to purchase the same value". Think of it like rapid inflation. Owning assets would then be the best way to preserve your wealth. Real ...


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