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27 sats \ 7 replies \ @Bell_curve 21 Aug \ parent \ on: Donald Trump Does Not Know the "Correct" Interest Rate econ
Setting interest rates is part of monetary policy but it shouldn't be the bedrock of economic activity
Something changed after 1995 and then another big change in response to the 2008 financial crisis
The price of money should be determined on the market. Monetary policy is commie BS.
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Is Libor determined by market or political forces?
Treasury yields are set by daily or weekly treasury auctions. What interest rate will you lend to US govt?
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I forgot Libor disappeared and was replaced by:
SOFR is based on transactions in the Treasury repurchase market and is preferable to LIBOR since it is based on data from observable transactions rather than estimated future borrowing rates.
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Wasn't there some scandal surrounding Libor back during the Great Recession?
I suppose I could look it up, but I probably won't.
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2007 and 2008 and 2022 IIRC
Libor is 'scandalous' because sometimes their rates differ from the Federal Funds rate.
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I think Libor is political, but I'd have to double check.
I would not lend to the US government, so I'm the wrong person to ask. My preference would be that nobody lend to them.
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