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The DOW is up 100 and Mortgage Bonds are flat after a bombing in New York over the weekend and ahead of the Fed meeting starting tomorrow. here is a 12% chance that the Open Market Committee will raise rates 0.25%.

Over the last 12 months, the Consumer Price Index has only raised 1.1%.  Between 1977-1981 it rose an average of 10.1% per year.  The going interest rates then and now reflect the growth and lack thereof.  Where the Cost of Funds Rate has been so low for so long and we still haven’t seen much growth, the Fed’s weapon of choice has been rendered virtually useless.