# Fed raises discount window **URL:** \ **Category:** Great Debates\ **Created:** [February 19, 2010, 12:06am UTC](https://boards.straightdope.com/t/fed-raises-discount-window/529566 "2010-02-19T00:06:06Z")\ **Posts on this page:** 5\ **Page:** 1
**Author:** ![Happy\_Poster](https://avatars.discourse-cdn.com/v4/letter/h/c89c15/32.png) [@Happy\_Poster](https://boards.straightdope.com/u/Happy_Poster)\ **Post date:** [February 19, 2010, 12:06am UTC](https://boards.straightdope.com/t/fed-raises-discount-window/529566/1 "2010-02-19T00:06:06Z")
Ok, so ECB finally starts signalling end of LTRO bullshit in what was it, November or December? (I remember how much I lost that day)… yesterday BOE minutes show disinterest (not exactly unanimous but more so than expected) in further extension of QE… now the Fed out of the blue raises the discount window… how are you ordinary Americans feeling about this? I’m telling you now it’s a sign your adjustable rate mortgages could be going up soon, and quite dramatically at that, btw, if you don’t get the implications. ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [February 19, 2010, 1:57am UTC](https://boards.straightdope.com/t/fed-raises-discount-window/529566/2 "2010-02-19T01:57:34Z")
I guess ‘ordinary Americans’ don’t recognize ‘ECB’, ‘LTRO’, ‘BOE’ and ‘QE’… ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [February 19, 2010, 2:10am UTC](https://boards.straightdope.com/t/fed-raises-discount-window/529566/3 "2010-02-19T02:10:13Z")
…but they probably are thinking WTF… -XT ---
**Author:** ![History\_Mystery\_and\_the\_Wolf](https://avatars.discourse-cdn.com/v4/letter/h/53a042/32.png) [@History\_Mystery\_and\_the\_Wolf](https://boards.straightdope.com/u/History_Mystery_and_the_Wolf)\ **Post date:** [February 19, 2010, 2:27am UTC](https://boards.straightdope.com/t/fed-raises-discount-window/529566/4 "2010-02-19T02:27:21Z")
‘ECB’ = The European Central Bank ‘LTRO’ = Long Term Financing Operation: an emergency liquidity scheme. ‘BOE’= Bank of England ‘QE’ = Qualitative easing: an electronic form of “printing money” ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [February 19, 2010, 4:12am UTC](https://boards.straightdope.com/t/fed-raises-discount-window/529566/5 "2010-02-19T04:12:39Z")
It means: a) the fed and central banks think the fiscal crisis has passed. b) economic growth is starting to heat up around the world. c) the central banks now have to figure out how to unwind all the money they injected into the financial system before velocity picks up and inflation rears it’s ugly head. The interesting thing now will be to see if they manage to unwind all this without triggering another recession. The big risk coming up is stagflation (growth increases, inflation goes up, interest rates are pushed up to check inflation, killing growth. Repeat as necessary, perhaps for a long time). [This article](http://www.google.com/hostednews/ap/article/ALeqM5jmT59dgLTTziX4p9X9MRBRpWZGdQD9DUMTJ00) is a good illustration of the potential problems: > [@](#): > > The Labor Department says the number of workers seeking unemployment benefits for the first time rose 31,000 to 473,000 last week. Economists polled by Thomson Reuters forecast a drop. > > Lower quarterly sales at Wal-Mart’s flagship U.S. stores and a disappointing forecast is hurting the stock and pulling other retailers lower. > … > Meanwhile, the Labor Department also said inflation at the wholesale level rose more than expected in January. Investors are concerned that rising prices could force the Federal Reserve to raise interest rates and risk hurting a rebound in the economy. > > Wholesale prices rose 1.4 percent last month, double what economists had forecast. Rising energy prices were the biggest factor behind the increase. The Producer Price Index rose 0.3 percent excluding volatile energy and food prices. Economists forecast that rate would edge up just 0.1 percent.