Chart of the Week: Real Fed Funds Rate

“Monetary policy is easy and by one measure has gotten easier,” according to Deutsche Bank. DB notes “Against the backdrop of an accommodative monetary stance, the economy will continue to perform well, especially interest sensitive sectors.”

Real Fed Funds Rate at New Low
Source: DB Global Markets Research

“It is no wonder then that interest sensitive spending — housing construction, building material, furniture and motor vehicles sales — has been so strong. Low real rates encourage consumers to take on debt. This will continue until interest rates move up substantially from their current levels.”

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