In a prior post, we opined that the Fed’s 1/4% rate increase shouldn’t have a material effect on business investment or consumer mortgage rates.
For details, see Fed Watch: Is 1/4 of 1 percent a big number or a little number ?
But it will have a BIG impact on the cost to service the U.S. Debt … which is now over $18 trillion.
A basic math principle: A little number times a very big number results in another very big number.
In this specific case, $18 trillion times .25% equals $45 billion.
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That said, I don’t think that the Fed discount rate is the right number to watch … especially if you’re a stock market watcher.
The Homa Files 