Author Archives: James_Hamilton

2010 Econbrowser NCAA tournament challenge

If you’re both a very faithful and a very passive Econbrowser reader, for two years now you’ve sat on the sidelines while you watched other, equally faithful but less passive readers participate in the world-famous Econbrowser NCAA Tournament Challenge, in which brave souls pretend they can predict a significant number of the winners of the games of the NCAA men’s basketball tournament. If so, here’s your third chance to sit on the sidelines again, or maybe even to participate this time.

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The Fed’s discount rate hike

The Federal Reserve Board announced on Thursday that it is raising the interest rate at which banks borrow from the Fed’s discount window to 0.75%, a 25-basis-point increase, and intends to return discount lending primarily to the traditional overnight loans.
“The rate hike cycle begins,” declared 24/7 Wall St, and
Business Week reported:

Treasuries fell, pushing yields to the highest levels in at least five weeks, amid concern the Federal Reserve’s increase in the discount rate signaled policy makers are moving closer to lifting benchmark borrowing costs.

But I don’t believe that’s what the discount rate hike means at all.

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