In 2016, the Federal Reserve will pay at least $12.2 billion to U.S. and foreign banks to keep the money created via its quantitative easing programs out of the economy. If the Fed raises rates as expected next year, the amount nearly doubles to $23.1 billion. http://finance.yahoo.com/news/federal-reserve-will-pay-banks--12-billion-in-2016-165253054.html
"After six years of near-zero interest rates, the Fed is in uncharted territory. Never before has a central bank attempted to raise rates after having provided so much stimulus and expanding its balance sheet to such a degree. The legacy of the Fed’s quantitative experiment is largess to banks and funds that will likely total $24 billion in 2016." My best guess on this whole 2009 crisis and subsequent engineering will be europe and rest of world will be printing faster and faster and the "best' of the worst will bere here, and as a result will enable "money" coming here to float the debt and equity markets such as the SP 500 etc: or we will have a worldwide collapse, one or the other
This is a disaster, we're going to the hell since 2008. Look at the Europe right now and their prospects in the future. In 2-3 years EU might not even exist. What about us? Fallout of ZIPR is inevitable.
Banks make money on spread. Bigger spread is also conducive to more money being legitimately created. The feds tightening is putting pressure on banks, hence more free taxpayer money being shoveled into the pockets of banks via the increase of ior to half percent. While the fed was presumed to be waiting for the mkt effect of rate hike news at last fed meeting, you can be sure they were also keeping a very close eye on how the news of themselves ripping off the taxpayer to funnel more money to banks was going to be perceived by the pitchfork wielding public. Yellen and company wiped the sweat off their brows when it was a non event in the news and with the public. John Q Citizen is again taking it up the rear end and not complaining.
The 2005 Greenspan comundrum. Deja Vu. If treasury 10 year notes and bond rates do not respond to fed policy on this first hike and say one other, that would seemingly place the feds optimism at odds with the markets pessimism, further flattening the curve. Will the fed further reduce incentive to loan with "that curve" and increase incentive to "park" and earn that incresing fed funds rate. Flattenng to inversion happens during past cycles but this this time has gotta be different with the tightrope we are on, evidenced by the monumentous decision to "begin" a divergent tightening cycle and raise .25%