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Crisis really OVER???... Why do I not believe you...
So Bank of America says the financial crisis is over. That the Fed's rate hike solidifies it!!! Not soo fast bail me out and make me rich bank of america.. what a joke for them to speak out. They should have their head down working for 2 years before they make a comment like that!!! Although positive sentiment leads to positive sentiment right.. besides I guess they owe the gov and Fed more than they'll ever be able to repay anyways. They owe the people of America their existance..
I also read today that inflation increased less than expected and that means the rate will stay frozen to the years end more than likely.. You be the judge, are we out of the woods?? I dont think so!!
Feb. 19 (Bloomberg) -- The Federal Reserve’s decision to raise the discount rate is a signal that “the financial crisis is largely over,” said Mickey Levy, chief economist at Bank of America in New York.
“It’s time to normalize things,” Levy said today in an interview on Bloomberg Radio. The Fed started lowering the rate on direct loans to banks when the financial crisis erupted in August 2007 and threatened the global banking system.
Central bankers will raise the benchmark federal funds rate on overnight loans between banks “when they’re convinced the economic recovery is sustainable,” Levy said. The overnight rate has been close to zero since December 2008.
The quarter-point increase in the discount rate to 0.75 percent is the first since June 2006. The central bank announced its decision yesterday after the close of trading in New York.
“The Fed, during the financial crisis, lowered the discount rate relative to the federal funds rate as part of their providing excess liquidity to the markets,” Levy said.
“Now that those excess liquidity facilities have run off, and we’re not in a financial crisis anymore, it’s quite natural to move back toward normalcy in the spread between the discount rate and the funds rate,” he said.
“Any bank in a non-crisis situation is not borrowing at the discount window unless they’re in major trouble” and as a result, the increase in the discount rate “doesn’t mean that much,” Levy said.