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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (22563)	2/1/2005 9:25:51 AM
From: Elroy Jetson	Read Replies (2) \| Respond to of 116555

Let's examine Money Market funds for a moment. The money market funds I know about are paying far less than the Fed's Discount Rate! When has that ever happened in the past? The Fed calls their rate the "Discount Rate", not the "Surcharge Rate". How did the Fed manage to raise their posted rates well past the market? Why is the market way behind the Fed? Before the Fed began raising rates one of the most competitive banks, ING-Direct, paid 2% on deposits. ingdirect.com Today after the Fed has "raised rates by 1.5%" ING raised their interest rate 0.35% to 2.35%. That's a peculiar sort of "lock-step". Why can borrowers borrow money from the TIPS auction at less than the rate paid by 30 day Treasury Bills? .