Housing.com News, Analysis & Opinion: Credit & Debt: Fed Holds The Course On Lending Rate; Stocks Party

Quick refresher as to the importance of this from Wikipedia. Essentially, any change to the Federal lending rate will result in an adjustment to the prime lending rate, which will affect any loans you want to take out or already have in effect.

I tend to agree with Calculated Risk's parsing of the statement. It seems like they're saying the economy is slacking and inflation is on the horizon, but the stocks rallied on even the faintest hope of a cut, evinced by the more moderate language in the statement.

It always amazes me how much of the modern economic process is influenced by hunches, blind faith, and superstition. In this case, parsing every word of a four-paragraph-statement and making huge stock moves because of that. ;) They might as well consult runes and horoscopes. :)

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As it seems everyone expected, the Federal Reserve voted to maintain the Federal Funds lending rate at 5.25 percent. AP coverage here, and the predicted stock rally coverage here. Quick refresher as to the importance of this from Wikipedia. Essentially, any change to the Federal lending rate will result in an adjustment to the prime lending rate, which will affect any loans you want to take out or already have in effect. I tend to agree with Calculated Risk's parsing of the statement. It seems like they're saying the economy is slacking and inflation is on the horizon, but the stocks rallied on even the faintest hope of a cut, evinced by the more moderate language in the statement. It always amazes me how much of the modern economic process is influenced by hunches, blind faith, and superstition. In this case, parsing every word of a four-paragraph-statement and making huge stock moves because of that. ;) They might as well consult runes and horoscopes. :)