Fed Funds Rate below 1%?

[mimo_100]

On June 25, 2003, the FOMC lowered the Fed Funds Rate from 1.25% to 1% (lowest in 45 years). From this point, they raised the rate in 25 basis point increments until it reached 5.25% on 6/29/2006.

The FOMC did not lower the rate until 9/18/2007, when they went from 5.25% to 4.75%. We currently stand at a Fed Funds rate of 3.50%. The prime rate is 6.5%.

It would not be unreasonable to believe that they could continue to lower to 1% again or even lower by summer of 2009. 250 basis points from now would translate into some nice profits in selected bonds and debt. What do you think?

[mimo_100]

On June 25, 2003, the FOMC lowered the Fed Funds Rate from 1.25% to 1% (lowest in 45 years). From this point, they raised the rate in 25 basis point increments until it reached 5.25% on 6/29/2006.

The FOMC did not lower the rate until 9/18/2007, when they went from 5.25% to 4.75%. We currently stand at a Fed Funds rate of 3.50%. The prime rate is 6.5%.

It would not be unreasonable to believe that they could continue to lower to 1% again or even lower by summer of 2009. 250 basis points from now would translate into some nice profits in selected bonds and debt. What do you think?

Today, January 30, 2008 the Fed lowered the fed funds rate to 3%. And we are headed lower.