Why does fed move FF rate in multiples of 25bps?

Discussion in 'Wall St. News' started by OTCkrak, Feb 9, 2010.

  1. current rate is 0-.25%

    why not allow for flexibility to move the rate.. 10bps

    if the rate was moved to 0-.125%, could provide some juice for the longs here :D

    a tightening to .35% would not be so harsh relative to .50%, correct? i am thinking in terms of elasticity and percent change.
  2. TGregg


    `Cuz 25 is the highest number they can count to.

    :D :D :D
  3. regulajo


    Hahahahahahahahahahahahahaha.....picks himself up off floor, so true!
  4. they dont want the banks to lose their money

    oh ,wait, they already did
  5. I think the .25 is a range.
  6. They don't need another mechanism to achieve flexibility, as they already have the FF effective that can deviate from FF target that moves in 25bps increments.