0.25%

Let's face it: adding a quarter per cent to the Federal Funds Rate is no big deal.  Yes, the greedy bankers, as expected, are raising their prime rates — making some loans more expensive — while letting interest rates on CDs and savings accounts stay the same.  They're increasing prime because they can.  They're leaving the interest they pay low for the same reason: because they can.

Really, though, the change is minimal.  Granted, the increase really wasn't justified by higher inflation, because inflation remains very low.  Some think the Fed was anticipating higher inflation based on possibly higher oil prices in the future, but as long as everywhere in the world except the USofA is stuck in slowdown, oil prices will stay low.  So why the increase in the rate?

Mostly, I believe, as an indicator that the recovery really is happening, and because its impact is beginning to be seen in wages as well as asset values.  If the Fed succeeds in instilling greater confidence, it may be that corporations will begin investing their very substantial profits in expanded production, rather than in mergers, acquisitions, and stock buybacks.

If rate increases come as slowly as Dr. Yellen has suggested, no economic slowdown need be anticipated, and the Fed will begin to regain some of the leverage it needs to respond to future crises.

Briefly...

The Fed
Face it: the potential increase in the Federal Funds Rate of one quarter of one per cent is purely symbolic.  While it may "roil" the markets, it will have virtually no impact on the real economy.  Assuming you're not a hedge fund manager, you really shouldn't give a damn.

The Iran Deal
Britain, France, China, Russia, and Germany made it perfectly clear that they would not maintain sanctions on Iran if the USofA failed to approve the deal, so all the opposition came down to Republicans determined to foil every Obama initiative and Democrats sucking up to AIPAC.  Thank you Barbara Mikulsky for finally dampening the bullshit, and screw you both, Chuck Schumer and Robert Menendez.

"Female Viagra"
Flibanserin, aka Addyí™, is not "female Viagra."  Viagra is just a boner pill, which allows older men with declining sex drive to fake it.  Flibanserin actually increases libido in some women willing to risk a long list of possible side effects.  Women don't need a Viagra-like drug because they already are quite capable of faking it without medical assistance.  If Valeant actually intends to pay Sprout Pharma a billion bucks for the rights to flibanserin, I'd sell my Valeant stock ASAP. 

Trump v. Sanders
Now wouldn't that be amusing, in a scary sort of way!

Dammit!

(Yes, another "dammit" post.)

I guess when everybody's expecting a cut in the federal funds rate, it just has to be cut. The expectations were for a cut between half-a-percent and one percent, so the Fed split the difference. Me, I'm with Fed governors Fisher and Plosser (Dallas and Philly, respectively), who favored a smaller cut. The two were characterized by the Times as "hawkish" on inflation.

Hawkish? I'm not hawkish. I'm scared.

The discount rate also was dropped by three-quarters, which is a good thing because the Fed may be the only place left for American banks to acquire capital. Low interest rates are sure to mean low interest by foreign lenders, especially when the dollars that get paid back will be worth so much less than the dollars invested. If I were the Sheik of Araby with a vault full of petrobucks, I guess dollars might be all I had to lend, though -- making the U.S. the only game in town. On the other hand, at the next meeting of OPEC, the notion of valuing a barrel of crude in euros rather than dollars might seem like a pretty good idea.