I was having lunch watching CNBC (bad move, never do that) when the Fed raised rates today. First time in nine years. Then they had their panel of idiots, but one major idiot in particular, this guy named Scott Minerd who says that the Fed is going to have to drain $1 trillion from the banking system. The guy is a total idiot. CNBC should win some archaeology award for digging up these human neanderthals and putting them on their air. The Fed PAYS INTEREST ON RESERVES, SCOTT. That means no draining necessary. Why would banks lend out below the funds rate? Reserve drains were from a time before the Fed paid interest on reserves. We're talking pre-2008. The Fed's OWN STATEMENT,which it released at the time of the rate decision, said it would keep doing what it's doing, that is, reinvesting principal payments and keeping holding sizable. Where do they get these idiots?
