Rebel Capitalist News The Fed Just Revealed The REAL TRUTH About QE
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Jul 9, 2025 The hosts dive into a Federal Reserve report detailing the impacts of quantitative easing on interest rates. They call for a significant reduction in rates, painting a picture of a possible return to zero lower bound conditions. This discussion leads to a strategic spotlight on gold, suggesting it may be a wise investment in uncertain economic times. Market behaviors are analyzed, revealing insights that could shape future financial landscapes.
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Fed Sees High Zero Lower Bound Risk
- The Fed's report reveals a significant risk of interest rates hitting the zero lower bound again in the medium term.
- Negative interest rate swaps signal markets expect much lower rates ahead, challenging conventional expectations.
Negative Swaps Signal Lower Rates
- Interest rate swaps trading negative imply the market anticipates much lower future interest rates.
- This is an unusual situation firms should monitor as it reflects significant economic uncertainty.
10% Probability of Zero Rates Again
- The Fed's derived probability indicates about a 10% chance rates hit zero lower bound within seven years.
- This suggests the possibility of another prolonged period of zero rates following a recession or crisis.