Fed Raises Benchmark Rate 25 Basis Points, Says 'Gradual' Instead of 'Measured'

From Jesse's cafe:

The distinction is that 'gradual' means as needed, or as seen to be necessary by the ongoing data.

'Measured' was meant to imply a steady 25 basis point at a time rate of increases to an objective which some thought to be 100 bp.

The Fed Funds target rate will be from 25 to 50 basis points, and the amount which the Fed pays to the Banks on excess reserves will be increased to 50 basis points.

In the second press release below, the NY Fed says that they have about $2 Trillion at the ready to back up the Fed's targets.

As suspected, the Fed raised, but it is very likely to be quite gradual, since the data does not fully support it despite all the verbage which has been put out there to justify it.

So to accentuate a very important point, this is not your father's interest rate tightening cycle.

The Fed is raising rates in order to 'end' ZIRP and to begin to provide themselves some maneuvering room out of the policy corner into which they had painted themselves in their thrashing within a credibility trap of lack of reform, top down stimulus, and thereby a continuing lack of broad, organic recovery which is apparent to all those who are not blinded by an ideological bias, a preoccupation with abstract and otherworldly models, and/or their paychecks.

http://jessescrossroadscafe.blogspot.kr/2015/12/fed-raises-benchmark-rate-25-basis.html