The US effective federal funds rate has been sitting close to zero since late 2008, and rose ever so slightly at the end of last year when the FED surprised everyone and increased interest rates by 25 basis points (0.25%).
After raising them in December 2015 the FED told the market back then that they were going to raise rates another 4 times in 2016. In a few days time we are going to roll into September and we have still not had 1 of the 4 forecasted interest rate rises.
With the US recovery from the 2008 recession at the slowest GDP growth rate in US history, its no wonder confidence in the FED has been falling since Alan Greenspan was FED chairman.
As interest rates have not returned to 2007 highs above 5% in the US and sit below 0.35% what will the FED do the next time the US falls back into recession, which normally occurs every 5 - 7 years?
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