Biggest Rate Cut in Quarter Century

Not a Portfolio.com Insider?

In This Issue of Condé Nast Portfolio

Home > Views > Blogs > Odd Numbers > Biggest Rate Cut in Quarter Century

Your Name

Your Email Address *
Send a copy to me

Recipient's Email Address *

Separate multiple email addresses (max 20) with commas.

Subject *

Message

0/1500

Email Confirmation

Odd Numbers

by Zubin Jelveh

Main

That Trusty Yield Curve On Recession Odds: Have They Declined?

Jan 22 2008 9:53AM EST

For those keeping score, the Fed's 75 basis point fed funds rate cut today was the largest single-day drop since 1982 when rates were slashed by 100 basis points three times.

Back then, moves like this weren't unheard of as the Volcker Fed wrestled with high inflation, sending the fed funds rate up to 20 percent in 1980.

The biggest previous cut in the discount rate, which was also cut 75 basis points today, was 1 percent in 1991.

UPDATE
A point of clarification: Some other sources are calling it the biggest cut since October 1984. The difference between the 1982 cuts and the 1984 cut was that the former took place on one day while the latter took place over 1.5 months.

Also worth mentioning, the federal funds rate was not the main focus of monetary policy until the early 1990's. Prior to that, growth in the stock of money was the primary target.

Extra: A time line of the fed funds rate since the early 90's.

See more in

monetary policy

Add Your Comment

Already a Portfolio.com Insider? Sign In

Comments*

Thank you for registering as a Portfolio.com Insider. Your comment has been added.

Create Your Public Profile

Recent Blog Posts

The Year in Research
Dec 31 2008 9:13AM EST
Mind Your Value Judgements
Dec 19 2008 7:52PM EST
S.E.C. Short-Sale Ban: Pretty Much Useless
Dec 19 2008 3:45PM EST
Advice from Japan: Don't Forget TARP 1
Dec 19 2008 2:31PM EST
Chart of the Day: Money Market Stress Easing
Dec 18 2008 8:57PM EST
House Price Bubble Deflated?
Dec 18 2008 5:57PM EST
Where Were the Whistleblowers?
Dec 16 2008 11:03PM EST
It's Just a Recession
Dec 13 2008 10:20PM EST
Comparing American and European Unemployment Insurance
Dec 12 2008 7:46PM EST
Back to Normal?
Dec 11 2008 4:33PM EST
Chart of the Day: Japan Under Quantitative Easing
Dec 10 2008 4:11PM EST
Don't Cry for Capitalism
Dec 9 2008 4:13PM EST
Can We Remember the Pain of Bubbles Past?
Dec 8 2008 4:58PM EST
The Pain to Come
Dec 5 2008 6:04PM EST
The Lending Standards Red Herring
Dec 4 2008 3:34PM EST

Links

Also in Portfolio.com

Visit our partner sites

Subscribe to a magazine:

Visit our sister sites:

Quotes delayed 15 minutes for NASDAQ. 20 minutes for NYSE and AMEX. Market Data provided by Interactive Data. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions. Company fundamental data provided by Hemscott. Economic data provided by Econoday. News provided by Comtex. Sec Filings data provided by Edgars. The Wall Street Horizon National Consumer Interest Rate Survey. ©2009 Wall Street Horizon. PMMS Mortgage Data ©2009 Freddie Mac. Mortgage averages are for conforming mortgages with 20% down.